WILSHIRE TARGET FUNDS INC, 485BPOS, 2000-12-18

WILSHIRE TARGET FUNDS INC
485BPOS, 2000-12-18

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<PAGE>

As filed with the Securities and Exchange Commission on December 18, 2000

Securities Act File No. 33-50390
Investment Company Act File No. 811-7076

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
---
Post-Effective Amendment No. 20 X
---- ---

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 21 X
---- ---

WILSHIRE TARGET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

c/o PFPC Inc.
101 Federal Street
BOSTON, MA 02110

Registrant's Telephone Number, including Area Code: (617) 535-0534

Name and Address of Agent for Service:
Gail A. Hanson, Esq.
Wilshire Target Funds, Inc.
c/o PFPC Inc.
101 Federal Street
Boston, MA 02110

It is proposed that the filing will become effective:

immediately upon filing pursuant to paragraph (b)
-----

X on December 20, 2000 pursuant to paragraph (b)
-----

60 days after filing pursuant to paragraph (a)(1)
-----

on pursuant to paragraph (a)(1)
----- -----------------
75 days after filing pursuant to paragraph (a)(2)
-----

on pursuant to paragraph (a)(2) of Rule 485
------ -----------------

<PAGE>
PROSPECTUS W I L S H I R E DECEMBER 20, 2000
------------------------------------
TARGET FUNDS, INC.

QUALIFIED CLASS SHARES
OF
WILSHIRE 5000 INDEX PORTFOLIO
(HTTP://WWW.WILFUNDS.COM)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Introduction........................... 2
Investment and Risk Summary............ 2
Main Investment Strategies......... 2
Who May Want to Invest in the
Portfolio........................ 3
Main Investment Risks.............. 3
Performance and Fee Information........ 3
More Information about Investments and
Risks................................. 4
Management of the Portfolio............ 5
Investment Adviser................. 5
Service and Distribution Plan...... 5
Shareholder Services Plan.......... 6
Shareholder Information................ 6
Purchases and Redemptions of
Shares........................... 6
Dividend and Distribution
Information........................... 6
Tax Information........................ 7
Financial Highlights................... 7
</TABLE>

--------------------------------------------------------------------------------

AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED ANY SHARES OF THIS FUND OR DETERMINED IF THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
--------------------------------------------------------------------------------

1
<PAGE>
INTRODUCTION

This prospectus describes the Qualified Class Shares of the Wilshire 5000 Index
Portfolio of the Wilshire Target Funds, Inc. The Wilshire 5000 Index Portfolio's
investment objective is to replicate as closely as possible the performance of
the Wilshire 5000 Index (referred to as the Index in this prospectus) before the
deduction of fund expenses. This Portfolio is an index fund and is called the
Portfolio in this prospectus. The Portfolio's investment goal may not be changed
without approval of its shareholders in accordance with the Investment Company
Act of 1940, as amended. The Portfolio is not guaranteed to meet its goal.

On the following pages you will find important information about the Portfolio
and its Qualified Class Shares, including:

- the main investment strategies used by Wilshire Associates Incorporated (the
"Adviser" or "Wilshire") in trying to achieve the Portfolio's objective,

- the main risks of an investment in the Portfolio, and

- fees and expenses that you will pay as a shareholder.

PORTFOLIO SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE SHARES ARE NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENT AGENCY. YOU COULD LOSE MONEY BY INVESTING IN THE
PORTFOLIOS.

INVESTMENT AND RISK SUMMARY

MAIN INVESTMENT STRATEGIES

WILSHIRE 5000 INDEX PORTFOLIO

- Invests primarily in the common stock of companies included in the Index
that are representative of the entire Index

- Uses a "quantitative" or "indexing" investment approach, which tries to
duplicate the investment composition and performance of the Index through
statistical procedures

- Normally holds stocks representing at least 90% of the total market value
of the Index

The Index includes all U. S. stocks regularly traded on the New York and
American Stock Exchanges and the NASDAQ over-the-counter market. It includes
over 7,000 stocks, with each stock weighted according to its market value. This
means that companies having a larger stock capitalization will have a larger
impact on the Index. The Index has been computed continuously since 1974, is
published daily in many major newspapers and is the broadest measure of the U.S.
equity market. The Portfolio does not hold

2
<PAGE>
all securities included in the Index; it normally holds stocks representing at
least 90% of the Index's total market value, which is between 2,000 and 3,000
stocks

WHO MAY WANT TO INVEST IN THE PORTFOLIO

Individuals cannot invest in Qualified Class Shares directly. Qualified Class
Shares are available only through a variable annuity contract your employer
bought from an insurance company (an "Insurer").

The Portfolio may appeal to you if:

- you are a long-term investor or saver

- you seek growth of capital

- you seek to capture the returns of the entire U.S. equity market

- you seek the potential risk reduction of broad diversification across both
large and small capitalization stocks and both value and growth stocks

- you seek an index fund which, unlike a traditional index fund, includes
stocks of small- and mid-capitalization, as well as large capitalization
companies

MAIN INVESTMENT RISKS

The Portfolio's share price will fluctuate with changes in the market value of
the securities it owns. All securities are subject to market, economic and
business risks that cause their prices to fluctuate. These fluctuations may not
be related to the fundamental characteristics of the companies issuing the
securities. Because the Portfolio provides a broad exposure to the U.S. stock
market rather than focusing on a distinct segment of the market such as small
capitalization value stocks, it may be less volatile than a fund which provides
exposure to a particular segment of the U.S. stock market.

PERFORMANCE AND FEE INFORMATION

There is no performance history for the Portfolio since it has been operating
for less than one calendar year.

FEES AND EXPENSES OF THE QUALIFIED CLASS SHARES

This table shows the fees and expenses you may pay when you buy and hold
Qualified Class Shares of the Portfolio. These fees and expenses do not reflect
expenses imposed by separate accounts of the Insurers through which an
investment in the Portfolio is made. See your employer's variable annuity
contract disclosure document for a description of those contract charges and
expenses.

3
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
QUALIFIED
CLASS
--------------
<S> <C>
Management Fees*............................................ 0.10%
12b-1 Fee................................................... 0.25%
Other Expenses.............................................. 0.62%
--------------
Total Portfolio Operating Expenses.......................... 0.97%
</TABLE>

* The Adviser has agreed to waive all of its advisory fees until further
notice. After this waiver, Total Portfolio Operating Expenses are expected to
be 0.87% for the Qualified Class shares.

EXAMPLE:

This example helps you to compare the cost of investing in the Qualified Class
Shares of the Portfolio with the cost of investing in other mutual funds. The
example assumes: (i) you invest $10,000 for the periods shown, (ii) you reinvest
all dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
QUALIFIED
CLASS
---------
<S> <C>
1 Year...................................................... $ 99
3 Years..................................................... $309
</TABLE>

MORE INFORMATION ABOUT INVESTMENTS AND RISKS

The Portfolio provides exposure to the U.S. stock market as a whole by investing
primarily in the common stocks of companies included in the Wilshire 5000 Index.
The Index is an unmanaged capitalization weighted index of over 7,000 U.S.
equity securities and includes all the U.S. stocks regularly traded on the New
York Stock Exchange, the American Stock Exchange and the NASDAQ over-the-
counter market. The Portfolio does not hold all securities included in the
Index; it normally holds stocks representing at least 90% of the Index's total
market value, which is between 2,000 and 3,000 stocks.

The Adviser manages the Portfolio using a "quantitative" or "indexing"
investment approach. It attempts to duplicate the performance of the Index
(before the deduction of Portfolio expenses) through statistical sampling
procedures. Wilshire does not use traditional methods of fund investment
management, such as selecting stocks based on financial analysis of individual
issuers and analysis of economic, industry and market trends. It selects stocks
based primarily on market capitalization and industry weightings.

Over time, Wilshire expects the correlation between the performance of the Index
and the Portfolio to be over 0.95 before the deduction of Portfolio expenses. A
correlation of 1.00 would indicate that the Portfolio's performance exactly
matched that of the Index. The Portfolio's ability to track the Index's

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<PAGE>
performance may be affected by factors such as the Portfolio's expenses, changes
in stocks represented in the Index, and the timing and amount of sales and
redemptions of Portfolio shares.

TEMPORARY INVESTMENTS

During adverse market or economic conditions, or to meet large withdrawals, the
Portfolio temporarily may invest all or a part of its assets in defensive
investments. These investments include U.S. government securities and high
quality U.S. dollar-denominated money market securities, including certificates
of deposit, bankers' acceptances, commercial paper, short-term debt securities
and repurchase agreements. When following a defensive strategy the Portfolio
will be less likely to achieve its goal.

RISK INFORMATION

Investing in the Portfolio involves the following principal risks:

EQUITY RISK. The principal risk of investing in the Portfolio is equity risk.
This risk is that the prices of stocks held by the Portfolio will change due to
general market and economic conditions, perceptions regarding the industries in
which the companies participate, and each company's particular circumstances.

INDEX RISK. There is a risk that the Portfolio's performance may not match the
Index exactly. Unlike the Index, the Portfolio incurs administrative expenses
and transaction costs in trading stocks. The Portfolio does not hold every stock
contained in the Index and there is a risk that the performance of the stocks
held in the Portfolio may not track exactly the performance of the stocks held
in the Index.

MANAGEMENT OF THE PORTFOLIO

INVESTMENT ADVISER

Wilshire Associates Incorporated is the investment adviser for the Portfolio.
Wilshire is located at 1299 Ocean Avenue, Suite 700, Santa Monica, California
90401. It was formed in 1972 and as of October 30, 2000, managed approximately
$8.87 billion in assets. Wilshire makes all investment decisions for the
Portfolio.

The Portfolio paid Wilshire no advisory fee during the last fiscal year;
however, Wilshire is entitled to receive an annual advisory fee equal to 0.10%
of the average daily net assets of the Portfolio. Wilshire has agreed to waive
all of its advisory fees until further notice.

Thomas D. Stevens is the primary portfolio manager as well as the President and
Chairman of Wilshire Target Funds, Inc. He has been a Senior Managing Director
and principal of Wilshire for more than six years, and has been employed by
Wilshire since 1980.

SERVICE AND DISTRIBUTION PLAN

The Portfolio has adopted a Service and Distribution Plan for its Qualified
Class Shares. The Plan authorizes payments by the Qualified Class Shares
annually of up to 0.25% of the average daily net assets attributable to the
Portfolio's Qualified Class Shares to finance distribution of those shares and
services to their shareholders. Payments may be made under the Plan to
securities dealers and other

5
<PAGE>
financial intermediaries who provide services such as answering shareholders'
questions regarding their accounts, providing shareholders with account
statements and trade confirmations and forwarding prospectuses and shareholder
reports. Distribution expenses covered by the Plan include marketing and
advertising expenses and the costs of printing prospectuses for prospective
investors.

SHAREHOLDER SERVICES PLAN

The Qualified Class Shares has adopted a shareholder services plan which
authorizes payments by the Qualified Class Shares annually of up to 0.15% of the
average daily net assets attributable to the Portfolio's Qualified Class Shares
for certain shareholder services provided by Insurers or other financial
intermediaries.

SHAREHOLDER INFORMATION

PURCHASES AND REDEMPTIONS OF SHARES

You cannot invest in Qualified Class Shares directly. Instead, you can
participate through a variable annuity contract purchased by your employer from
an Insurer with which the Portfolio has entered into an agreement. The
availability of the Qualified Class Shares depends on the provisions of the
variable annuity contract. For more information, see your employer's contract
disclosure document.

Qualified Class Shares of the Portfolio are offered to Insurers without a sales
charge. Each Insurer submits purchase and redemption orders to us on a daily
basis. Insurers may purchase shares on any day when the New York Stock Exchange
(NYSE) is open for business (referred to as a business day). We reserve the
right to reject any purchase order if we believe it is in the Portfolio's best
interest to do so. The Portfolio does not issue share certificates.

When an Insurer purchases Qualified Class Shares of the Portfolio, the price it
pays per share is the "net asset value" of the shares next determined after we
receive its purchase order. Similarly, the price an Insurer receives when it
redeems shares is the net asset value of the shares next determined after we
receive its redemption request. We calculate the net asset value per share of
each class of the Portfolio at the close of business of the NYSE on each
business day. Net asset value is calculated by adding the Qualified Class's
share of the value of the individual securities held by the Portfolio,
subtracting the liabilities of that class and dividing by the total number of
Qualified Class Shares outstanding. We value each individual security the
Portfolio holds by using market quotations; if a market quotation is not
available a fair value is determined by or under the direction of the Board of
Directors of Wilshire Target Funds, Inc.

DIVIDEND AND DISTRIBUTION INFORMATION

The Portfolio intends to pay any dividends and capital gain distributions at
least once a year. Dividends and capital gains distributions of the Portfolio
will be automatically reinvested at net asset value in additional Qualified
Class Shares of the Portfolio. There are no sales or other charges for the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no

6
<PAGE>
assurance that the Portfolio will pay any dividends or realize any capital
gains. Dividends and distributions may differ for different classes of the
Portfolio.

The value of your Qualified Class Shares will be reduced by the amount of any
dividends and distributions. If an Insurer purchases shares shortly before the
record date for a dividend or distribution of capital gains, it will pay the
full price for the shares and receive some portion of the price back as a
taxable dividend or distribution.

TAX INFORMATION

The Portfolio ordinarily declares and distributes net realized gains, if any,
once a year, but may make distributions on a more frequent basis to comply with
the distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
1940 Act. The Company will not make distributions to Insurers from net realized
gains unless capital loss carryovers, if any, have been utilized or have
expired. The Portfolio intends to distribute substantially all of its net
investment income and net realized securities gains on a current basis. All
expenses are accrued daily and deducted before declaration of dividends to
investors.

For a discussion of the impact on you of income taxes an Insurer may owe as a
result of its ownership of shares of the Portfolio, its receipt of dividends and
distributions on those shares, and its gains from the purchase and sale of
shares, see your employer's contract disclosure document.

This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of an Insurer's
investment in the Portfolio.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the financial
performance of the Portfolio's shares for the period since the Qualified Class
of shares was first offered. Certain information reflects the financial
performance of a single share. The total return in the table represents the rate
that an investor would have earned or lost on an investment in a portfolio
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the
Portfolio's financial statements and related notes, are included in the annual
report, which is available on request.

7
<PAGE>
WILSHIRE 5000 INDEX PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
QUALIFIED
CLASS SHARES
-------------
PERIOD
ENDED
8/31/00+
-------------
<S> <C>
Net asset value, beginning of period........................ $ 10.94
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.09***
Net realized and unrealized gain on investments............. 1.20
-------
TOTAL FROM INVESTMENT OPERATIONS............................ 1.29
-------
Net asset value, end of period.............................. $ 12.23
=======
Total return (a)............................................ 11.79%**
=======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................ $ 1,158
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 0.60%*
Operating expenses excluding custody earnings credit........ 0.62%*
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 0.97%*
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 0.54%*
Portfolio turnover rate..................................... 61%**
</TABLE>

------------------------------

+ The Wilshire 5000 Qualified Class shares commenced operations on May 12,
2000.

* Annualized.

** Non-annualized.

*** The selected per share data was calculated using the weighted average shares
method for the period.

(a) Total return represents aggregate total return for the period indicated.

8
<PAGE>
(This page has been left blank intentionally.)

9
<PAGE>
(This page has been left blank intentionally.)

10
<PAGE>
(This page has been left blank intentionally.)

11
<PAGE>
PROSPECTUS DECEMBER 20, 2000
HORACE MANN CLASS OF SHARES
OF
WILSHIRE 5000 INDEX PORTFOLIO

OFFERED BY HORACE MANN INVESTORS, INC.
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Introduction.............................. 2
Investment and Risk Summary............... 2
Main Investment Strategies............ 2
Who May Want to Invest in the
Portfolio........................... 3
Main Investment Risks................. 3
Performance and Fee Information........... 3
More Information about Investments and
Risks.................................... 4
Management of the Portfolio............... 5
Investment Adviser.................... 5
Service and Distribution Plan......... 5
Shareholder Information................... 6
How to Purchase Portfolio Shares...... 6
How to Sell Portfolio Shares.......... 7
Pricing of Shares..................... 8
Dividend and Distribution Information..... 9
Tax Information........................... 9
Financial Highlights...................... 9
</TABLE>

--------------------------------------------------------------------------------

1
<PAGE>
INTRODUCTION

This prospectus describes the Horace Mann Class of Shares of the Wilshire 5000
Index Portfolio (the "Portfolio") offered by the Wilshire Target Funds, Inc.
(the "Company", "we" or "us").

The Portfolio's investment objective is to replicate as closely as possible the
performance of the Wilshire 5000 Index (referred to as the Index in this
prospectus) before the deduction of fund expenses. The Portfolio's investment
goal may not be changed without approval of its shareholders in accordance with
the Investment Company Act of 1940, as amended. The Portfolio is not guaranteed
to meet its goal.

On the following pages you will find important information about the Portfolio
and its Horace Mann Class of Shares, including:

- the main investment strategies used by Wilshire Associates Incorporated (the
"Adviser" or "Wilshire") in trying to achieve the Portfolio's objective,

- the main risks of an investment in the Portfolio,

- the fees and expenses that you will pay as a shareholder.

Portfolio shares are not deposits or obligations of, or guaranteed or
endorsed by, any bank. The shares are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency. You could lose money by investing in the
Portfolio.

INVESTMENT AND RISK SUMMARY

MAIN INVESTMENT STRATEGIES

WILSHIRE 5000 INDEX PORTFOLIO

- Invests primarily in the common stock of companies included in the Index
that are representative of the entire Index

- Uses a "quantitative" or "indexing" investment approach, which tries to
duplicate the investment composition and performance of the Index through
statistical procedures

- Normally holds stocks representing at least 90% of the total market value
of the Index

The Index includes all U.S. stocks regularly traded on the New York and American
Stock Exchanges and the NASDAQ over-the-counter market. It includes over 7,000
stocks, with each stock weighted according to its market value. This means that
companies having a larger stock capitalization will have a larger impact on the
Index. The Index has been computed continuously since 1974, is published daily
in many major newspapers and is the broadest measure of the U.S. equity market.
The Portfolio does not hold all securities included in the Index; it normally
holds stocks representing at least 90% of the Index's total market value, which
is between 2,000 and 3,000 stocks.

2
<PAGE>
WHO MAY WANT TO INVEST IN THE PORTFOLIO?

The Portfolio may appeal to you if:

- you are a long-term investor or saver

- you seek growth of capital

- you seek to capture the returns of the entire U.S. equity market

- you seek the potential risk reduction of broad diversification across
both large and small capitalization stocks and both value and growth
stocks

- you seek an index fund which, unlike a traditional index fund, includes
stocks of small- and mid-capitalization, as well as large
capitalization companies

MAIN INVESTMENT RISKS

The Portfolio's share price will fluctuate with changes in the market value of
the securities it owns. All securities are subject to market, economic and
business risks that cause their prices to fluctuate. These fluctuations may not
be related to the fundamental characteristics of the companies issuing the
securities. Because the Portfolio provides a broad exposure to the U.S. stock
market rather than focusing on a distinct segment of the market such as small
capitalization value stocks, over time it may be less volatile than a fund which
provides exposure to a particular segment of the U.S. stock market.

PERFORMANCE AND FEE INFORMATION

As of the calendar year ended December 31, 1999, the Portfolio had been
operating for less than one year and, therefore, no performance history is
included.

Performance for the Wilshire 5000 Index, the Portfolio's benchmark, has been
included for the one, five, ten, fifteen and twenty years ended December 31,
1999 and the nine months ended September 30, 2000. Note that past performance of
the Index does not indicate the Portfolio's performance. This is not the
Portfolio's performance.

AVERAGE ANNUAL TOTAL RETURN

<TABLE>
<CAPTION>
YEARS ENDED WILSHIRE 5000
DECEMBER 31, 1999 INDEX
-------------------- -------------
<S> <C>
Year to Date 9/30/00 (0.60)%
1 Year 23.56 %
5 Years 27.06 %
10 Years 17.59 %
15 Years 18.09 %
20 Years 17.11 %
</TABLE>

FEES AND EXPENSES OF THE HORACE MANN CLASS OF SHARES

This table shows the fees and expenses you may pay when you buy and hold Horace
Mann Class of Shares of the Portfolio.

3
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS): (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)

<TABLE>
<CAPTION>
HORACE MANN
CLASS
-----------
<S> <C>
Management Fees*............................................ 0.10%
12b-1 Fee................................................... 0.35%
Other Expenses.............................................. 0.62%
-----

Total Portfolio Operating Expenses.......................... 1.07%
</TABLE>

* The Adviser has agreed to waive all of its advisory fees until further
notice. After this waiver, Total Portfolio Operating Expenses are expected to
be 0.97%.

EXAMPLE:

This example helps you to compare the cost of investing in the Horace Mann Class
of Shares of the Portfolio with the cost of investing in other mutual funds. The
example assumes: (i) you invest $10,000 for the periods shown, (ii) you reinvest
all dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses (without expense reimbursements)
remain the same.

<TABLE>
<CAPTION>
HORACE MANN
CLASS
-----------
<S> <C>
1 Year...................................................... $109
3 Years..................................................... $340
</TABLE>

MORE INFORMATION ABOUT INVESTMENTS AND RISKS

WILSHIRE 5000 INDEX PORTFOLIO

The Portfolio provides exposure to the U.S. stock market as a whole by investing
primarily in the common stocks of companies included in the Index. The Index is
an unmanaged capitalization weighted index of over 7,000 U.S. equity securities
and includes all the U.S. stocks regularly traded on the New York Stock
Exchange, the American Stock Exchange and the NASDAQ over-the-counter market.
The Portfolio does not hold all securities included in the Index; it normally
holds stocks representing at least 90% of the Index's total market value, which
is between 2,000 and 3,000 stocks.

4
<PAGE>
performance may be affected by factors such as the Portfolio's expenses, changes
in stocks represented in the Index, and the timing and amount of sales and
redemptions of Portfolio shares.

TEMPORARY INVESTMENTS

RISK INFORMATION

Investing in the Portfolio involves the following principal risks:

MANAGEMENT OF THE PORTFOLIO

INVESTMENT ADVISER

Thomas D. Stevens is the primary portfolio manager as well as the President and
Chairman of the Company. He has been a Senior Managing Director and principal of
Wilshire for more than six years, and has been employed by Wilshire since 1980.

SERVICE AND DISTRIBUTION PLAN

The Portfolio has adopted a Service and Distribution Plan for its Horace Mann
Class shares. The Plan authorizes payments by the Company to the Distributor
annually of 0.35% of the average daily net assets attributable to the Horace
Mann Class shares to finance distribution of those shares and services to their
shareholders. Pursuant to a Dealer Agreement between the Distributor and Horace
Mann Investors, Inc. ("Horace Mann") the Distributor pays to Horace Mann 0.35%
of the daily net assets attributable to the Horace Mann Class of Shares for
providing services to holders of shares and for maintaining shareholder
accounts, such as answering shareholder inquiries regarding the Portfolio and

5
<PAGE>
providing shareholder reports and other information. Distribution expenses
covered by the Plan include marketing and advertising expenses and the costs of
printing prospectuses for prospective investors.

SHAREHOLDER INFORMATION

If you have questions about the Portfolio or your account you may call us at
1-877-720-3701 or the Horace Mann home office at 1-800-999-1030.

HOW TO PURCHASE PORTFOLIO SHARES

You may buy Horace Mann Class of Shares without a sales charge on any day when
the New York Stock Exchange (NYSE) is open for business (referred to as a
business day). To purchase Horace Mann Class shares, contact us at
1-877-720-3701. We reserve the right to reject any purchase order if we believe
it is in the Portfolio's best interest to do so. The Portfolio does not issue
share certificates.

The minimum initial investment in the Portfolio is $1,000. Subsequent
investments must be at least $100. Lower minimums are available for the
Scheduled Payment Plan. We may change the initial and subsequent minimum
investment requirements at any time.

You may purchase shares as follows:

(1) HORACE MANN WILSHIRE 5000 SCHEDULED PAYMENT PLAN. Horace Mann Wilshire 5000
Scheduled Payment Plan permits you to purchase shares (minimum of $50 per
transaction) at regular intervals. This service may provide you with a
convenient way to invest for long-term and intermediate financial goals. You may
purchase shares by electronically transferring funds from your bank account. You
may choose to have your bank account debited in a specified amount, and shares
purchased, either (i) once a month on the first or fifteenth day or (ii) twice a
month on both days. Your account must be at a bank which is an Automated
Clearing House member.

You may establish a Scheduled Payment Plan by either checking the appropriate
box on the account application or filing an authorization form with us. You may
obtain the necessary authorization form, cancel your participation in this
privilege or change the amount of purchase at any time (i) by mailing a letter
to Wilshire Target Funds, Inc. -- Horace Mann Class of Shares, P.O. Box 60488,
King of Prussia, Pennsylvania 19406-0488 or (ii) by calling us at
1-877-720-3701. The Company may modify or terminate this privilege at any time
or charge a service fee. No such fee currently is contemplated.

(2) WIRE PAYMENTS. You can pay by wire if your bank account is maintained at a
commercial bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City. Send funds by wire to:

Boston Safe Deposit and Trust Company (ABA #011001234)

Wilshire Target Funds, Inc. -- Horace Mann Class of Shares

DDA #065-587

[(Portfolio Account No. or Your Taxpayer Identification No. for new
accounts)]

If your initial purchase of Portfolio shares is by wire, please call
1-877-720-3701 after completing your wire payment to obtain your Portfolio
account number. Please include your Portfolio account number on the Account
Application and promptly mail the Account Application to us, as no redemptions
will be permitted until the Account Application is received.

6
<PAGE>
(3) CHECKS. Checks should be made payable to "Wilshire Target Funds, Inc. --
Horace Mann Class of Shares."

(4) ELECTRONIC FUNDS TRANSFER. You may make subsequent investments by electronic
transfer of funds from an account maintained in a bank that is an Automated
Clearing House member. The minimum purchase by electronic fund transfer is $500
and the maximum is $50,000 for any one transfer. You must direct the bank to
send funds through the Automated Clearing House to:

Boston Safe Deposit and Trust Company

Wilshire Target Funds, Inc. -- Horace Mann Class of Shares

[Your Shareholder Account Number]

Account of [Your Name]

HOW TO SELL PORTFOLIO SHARES

You may sell your shares back to the Portfolio (known as redeeming shares) on
any business day without a redemption fee. The Portfolio may temporarily stop
redeeming its shares when the NYSE is closed or trading on the NYSE is
restricted, when an emergency exists and the Portfolio cannot sell its shares or
accurately determine the value of its assets, or if the Securities and Exchange
Commission orders the Portfolio to suspend redemptions. We reserve the right to
impose a redemption fee in the future.

(A) BY TELEPHONE. To sell your shares in the Portfolio by telephone you may call
us at 1-877-720-3701. You may request that redemption proceeds be mailed to you
by check or forwarded to you by bank wire.

1. Telephone Redemption by Check. We will make checks payable to the name
in which the account is registered and normally will mail the check to
you at your address of record within seven days after we receive your
request. Any request for redemption proceeds must be in writing with the
signature guaranteed if made within 60 days of changing your address of
record.

2. Telephone Redemption by Wire. We accept telephone requests for wire
redemptions of at least $1,000 for the Portfolio. We will send a wire to
either a bank designated on your Account Application or on a subsequent
letter with a guaranteed signature. Your designated bank must be a member
of the Federal Reserve system or a correspondent bank. We normally wire
proceeds on the next business day after we receive your request.

(B) BY MAIL. You may also sell your shares by mailing a request to: Wilshire
Target Funds, Inc., -- Horace Mann Class of Shares, P.O. Box 60488, King of
Prussia, Pennsylvania 19406-0488. We normally will mail a check to you at your
address of record within seven days after we receive your request. Your letter
should state that you are redeeming Horace Mann Class of Shares of the Wilshire
5000 Index Portfolio, the dollar amount or number of shares you are redeeming,
and your account number. You must sign the letter in exactly the same way the
account is registered and if there is more than one owner of shares, all owners
must sign. We require a signature guarantee for each signature on your
redemption letter if you redeem more than $50,000 or if proceeds are to be paid
to someone other than the registered holder of shares or, if the investor's
address of record has changed within the past 60 days.

7
<PAGE>
SIGNATURE GUARANTEES. If a signature guarantee is required you must have a
medallion signature guarantee from an eligible guarantor (a notarized signature
is not sufficient). You can obtain a medallion signature guarantee from a
domestic bank or trust company, broker dealer, clearing agency, savings
association, or other financial institution which participates in a medallion
program recognized by the Securities Transfer Association. The three recognized
medallion programs are Securities Transfer Agents Medallion Program (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange Inc.
Medallion Signature Program (NYSE MSP). Signature guarantees from financial
institutions which are not participating in one of these programs will not be
accepted.

INVOLUNTARY REDEMPTION. We may redeem all shares in your account if their value
falls below $500 (but not as a result of a decline in their net asset value). We
will notify you in writing and give you 45 days to increase the value of your
account to at least $500.

REDEMPTION PROCEEDS. You cannot redeem shares until we have received your
Account Application. If you purchased your shares by check, you may not redeem
shares until the check clears, which may take up to 15 days following purchase.
Although we will delay the processing of the redemption until the check clears,
your shares will be valued at the next determined net asset value after we
receive your redemption order.

The Portfolio may pay your redemption proceeds wholly or partly in securities.
This would happen only in the rare instance that the Wilshire Target Funds, Inc.
Board of Directors believes it would be in the Portfolio's best interest not to
pay redemption proceeds in cash. When you sell these securities you will pay
brokerage commissions.

If you choose to receive distributions in cash and distribution checks are
returned as undeliverable, or remain uncashed for six months, we will change
your account so that all future distributions are reinvested in your account.
Checks that remain uncashed for six months will be canceled and the money
reinvested in the Portfolio. No interest is paid during the time a redemption
check is outstanding.

TELEPHONE TRANSACTIONS. If you authorize telephone transactions, bear in mind
that you may be responsible for any fraudulent telephone transaction in your
account so long as Wilshire Target Funds and its service providers follow
reasonable procedures to protect against unauthorized transactions. All
telephone calls are recorded for your protection and you will be asked for
information to verify your identification. If you are unable to reach us by
telephone (for example, after normal business hours), consider placing your
order by mail.

PRICING OF SHARES

When you purchase Horace Mann Class of Shares of the Portfolio, the price you
pay per share is the "net asset value" of the shares next determined after we
receive your purchase order. Similarly, the price you receive when you redeem
your shares is the net asset value of the shares next determined after we
receive your redemption request. We calculate the net asset value per share at
the close of business on the NYSE on each business day. Net asset value is
calculated by adding the Horace Mann Class's share of the value of the
individual securities held by the Portfolio, subtracting the liabilities of that
class, and dividing by the total number of Horace Mann Class shares outstanding.
We value each individual security the Portfolio holds by using market
quotations; if a market quotation is not available a fair value is determined by
or under the direction of the Board of Directors of Wilshire Target Funds, Inc.

8
<PAGE>
DIVIDEND AND DISTRIBUTION INFORMATION

The Portfolio intends to pay any dividends and capital gain distributions at
least once a year. You may have dividends or capital gains distributions of the
Portfolio automatically reinvested at net asset value in additional shares of
the Portfolio. You will make an election to receive dividends and distributions
in cash or shares at the time you purchase your shares. You may change this
election by notifying us in writing at any time before the record date for a
particular dividend or distribution. There are no sales or other charges for the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that the Portfolio will pay any
dividends or realize any capital gains. Dividends and distributions may differ
for different classes of the Portfolio.

The value of your shares will be reduced by the amount of any dividends and
distributions. If you purchase shares shortly before the record date for a
dividend or distribution of capital gains, you will pay the full price for the
shares and receive some portion of the price back as a taxable dividend or
distribution.

TAX INFORMATION

We expect that the Portfolio's distributions will consist primarily of net
investment income and capital gains, which may be taxable at different rates
depending on the length of time the Portfolio holds its assets. Dividends out of
net investment income and distributions of realized short-term capital gains are
taxable to you as ordinary income. Distributions of net long-term capital gains
are taxable to you at long-term capital gain rates. The Portfolio's
distributions may be subject to federal, state or local taxes whether you
receive them in cash or reinvest them in additional shares of the Portfolio. An
exchange of the Portfolio's shares for shares of another Portfolio will be
treated for tax purposes as a sale of the Portfolio's shares, and any gain you
realize on the exchange may be taxable. Foreign shareholders may be subject to
special withholding requirements.

This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in the Portfolio.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the financial
performance of the Portfolio's shares for the period since the Horace Mann Class
of shares was first offered. Certain information reflects the financial
performance of a single share. The total return in the table represents the rate
that an investor would have earned or lost on an investment in a portfolio
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the
Portfolio's financial statements and related notes, are included in the annual
report, which is available on request.

WILSHIRE 5000 INDEX PORTFOLIO

9
<PAGE>
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
HORACE MANN CLASS SHARES
------------------------
PERIOD
ENDED
8/31/00+
------------------------
<S> <C>
Net asset value, beginning of period........................ $ 10.00
--------

INCOME FROM INVESTMENT OPERATIONS:

Net investment income....................................... 0.07***
Net realized and unrealized gain on investments............. 2.21
--------

Total from investment operations............................ 2.28
--------

LESS DISTRIBUTIONS:

Dividends from net investment income........................ (0.06)
--------

Total distributions......................................... (0.06)
--------

Net asset value, end of period.............................. $ 12.22
========

Total return (a)............................................ $ 22.87%**
========

RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:

Net assets, end of period (in 000's)........................ $ 1,432
Operating expenses including reimbursement/waiver/custody
earnings credit........................................... 0.70%*
Operating expenses excluding custody earnings credit........ 0.72%1*
Operating expenses excluding reimbursement/waiver/custody
earnings credit........................................... 1.07%*
Net investment income including reimbursement/waiver/custody
earnings credit........................................... 0.44%*
Portfolio turnover rate..................................... 61%**
</TABLE>

------------------------

+ The Wilshire 5000 Horace Mann Class shares commenced operations on
December 10, 1999

* Annualized.

** Non-annualized.

*** The selected per share data was calculated using the weighted average
shares method for the period.

(a) Total return represents aggregate total return for the period indicated.

10
<PAGE>
(This page has been left blank intentionally.)

11
<PAGE>
(This page has been left blank intentionally.)

12
<PAGE>
PROSPECTUS W I L S H I R E DECEMBER 20, 2000
------------------------------------
TARGET FUNDS, INC.

INVESTMENT AND INSTITUTIONAL CLASS SHARES
OF
LARGE COMPANY GROWTH PORTFOLIO
LARGE COMPANY VALUE PORTFOLIO
SMALL COMPANY GROWTH PORTFOLIO
SMALL COMPANY VALUE PORTFOLIO
WILSHIRE 5000 INDEX PORTFOLIO
(HTTP://WWW.WILFUNDS.COM)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Introduction........................... 2
Investment and Risk Summary............ 2
Main Investment Strategies........... 2
Who May Want to Invest in the
Portfolios......................... 4
Main Investment Risks................ 4
Performance and Fee Information........ 5
More Information about Investments and
Risks................................. 13
Management of the Portfolios........... 16
Investment Adviser................... 16
Service and Distribution Plan........ 16
Shareholder Information................ 17
How to Buy Portfolio Shares.......... 17
How to Sell Portfolio Shares......... 18
Pricing of Shares.................... 20
How to Exchange Portfolio Shares..... 20
Retirement Plans..................... 21
Dividend and Distribution
Information........................... 21
Tax Information........................ 22
Financial Highlights................... 23
</TABLE>

--------------------------------------------------------------------------------

1
<PAGE>
INTRODUCTION

This prospectus describes the following Portfolios offered by the Wilshire
Target Funds, Inc.

<TABLE>
<S> <C>
- Large Company Growth Portfolio INVESTMENT OBJECTIVE: to provide investment results of
- Large Company Value Portfolio a portfolio of publicly traded common stocks of
- Small Company Growth Portfolio companies in the applicable sub-category of the
- Small Company Value Portfolio Wilshire 5000 Index (referred to as the Index in this
prospectus). These Portfolios are not index funds and
are called the Style Portfolios in this prospectus.

- The Wilshire 5000 Index INVESTMENT OBJECTIVE: to replicate as closely as
Portfolio possible the performance of the Index before the
deduction of fund expenses. This Portfolio is an index
fund and is called the Index Portfolio in this
prospectus.
</TABLE>

No Portfolio's investment goal may be changed without approval of the
Portfolio's shareholders in accordance with the Investment Company Act of 1940.
No Portfolio is guaranteed to meet its goal.

On the following pages you will find important information about each Portfolio
and its Institutional and Investment classes of shares, including:

- the main investment strategies used by Wilshire Associates Incorporated (the
"Adviser" or "Wilshire") in trying to achieve the Portfolio's objective

- the main risks of an investment in the Portfolio

- the Portfolio's past performance measured on both a year-by-year and long-term
basis, when available

- fees and expenses that you will pay as a shareholder

INVESTMENT AND RISK SUMMARY

MAIN INVESTMENT STRATEGIES

LARGE COMPANY GROWTH PORTFOLIO

- Focuses on the large company growth segment of the U.S. equity market

- Invests in companies with the largest market capitalizations - greater
than $2.3 billion as of the date of this prospectus

2
<PAGE>
- Invests in companies that have above average earnings or sales growth
histories and retention of earnings; often such companies have higher
price to earnings ratios

SMALL COMPANY GROWTH PORTFOLIO

- Focuses on the small company growth segment of the U.S. equity market

- Invests in companies with smaller market capitalizations - between $2.3
billion and $268 million as of the date of this prospectus

- Invests in companies that have above average earnings or sales growth
histories and retention of earnings; often such companies have higher
price to earnings ratios

- Less emphasis on a long history of established growth than the Large
Company Growth Portfolio

LARGE COMPANY VALUE PORTFOLIO

- Focuses on the large company value segment of the U.S. equity market

- Invests in companies with the largest market capitalizations - extending
down to $2.3 billion as of the date of this prospectus

- Invests in companies with relatively low price to book value ratios, low
price to earnings ratios, and higher than average dividend yield (which
means that their price is low relative to the size of the dividend)

SMALL COMPANY VALUE PORTFOLIO

- Focuses on the small company value segment of the U.S. equity market

- Invests in companies with smaller market capitalizations - between $2.3
billion and $268 million as of the date of this prospectus

- Invests in companies with relatively low price to book value ratios, low
price to earnings ratios, and relatively high dividend yield (dividend
yields for small companies are generally less than for large companies)

Each Style Portfolio attempts to invest virtually all of its assets in common
stock of companies in its category.

WILSHIRE 5000 INDEX PORTFOLIO

- Invests primarily in the common stock of companies included in the Index
that are representative of the entire Index

- Uses a "quantitative" or "indexing" investment approach, which tries to
duplicate the investment composition and performance of the Index through
statistical procedures

- Normally holds stocks representing at least 90% of the total market value
of the Index

3
<PAGE>
major newspapers and is the broadest measure of the U.S. equity market. The
Index Portfolio does not hold all securities included in the Index; it normally
holds stocks representing at least 90% of the Index's total market value, which
is between 2,000 and 3,000 stocks.

WHO MAY WANT TO INVEST IN THE PORTFOLIOS

A Style Portfolio may appeal to you if:

- you are a long-term investor or saver

- you seek growth of capital

- you believe that the market will favor a particular style, such as large
cap growth stocks, over other styles in the long term and you want a
focused exposure to that style

- you own other funds or stocks which provide exposure to some but not all
styles and would like to provide a more complete exposure to the equity
market

The Index Portfolio may appeal to you if:

- you are a long-term investor or saver

- you seek growth of capital

- you seek to capture the returns of the entire U.S. equity market

- you seek the potential risk reduction of broad diversification across both
large and small capitalization stocks and both value and growth stocks

- you seek an index fund which, unlike a traditional index fund, includes
stocks of small- and mid-capitalization, as well as large capitalization
companies

MAIN INVESTMENT RISKS

Each Portfolio's share price will fluctuate with changes in the market value of
the securities it owns. All securities are subject to market, economic and
business risks that cause their prices to fluctuate. These fluctuations may not
be related to the fundamental characteristics of the companies issuing the
securities. For example, if large capitalization growth stocks fall out of favor
generally with investors, the value of the Large Company Growth Portfolio may
decline. You may lose money by investing in a Portfolio, particularly if you
choose a Portfolio which follows a particular style that has performed poorly.
Because the Index Portfolio provides a broad exposure to the U.S. stock market
rather than focusing on a distinct segment of the market such as small
capitalization value stocks, it may be a less volatile investment than the Style
Portfolios.

4
<PAGE>
PERFORMANCE AND FEE INFORMATION

--------------------------------------------------------------------------------

LARGE COMPANY GROWTH PORTFOLIO

The bar chart and the performance table below provide an indication of the risks
of investing in the Large Company Growth Portfolio by showing how Investment
Class Shares of the Large Company Growth Portfolio have performed in the past
and by showing how the Portfolio's average annual total returns compare to those
of the Index. The chart and table assume reinvestment of dividends and
distributions. The Portfolio's past performance does not necessarily indicate
how it will perform in the future.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

TOTAL
RETURN

During the period shown in the bar chart, the highest return for a quarter was
25.32% for the quarter ended December 31, 1998 and the lowest return for a
quarter was (7.91%) for the quarter ended September 30, 1998. The return for the
period from January 1, 2000 through September 30, 2000 was (1.31%).

The returns for the Portfolio's Investment Class Shares were slightly lower than
the Institutional Class Shares because Investment Class Shares pay Rule 12b-1
fees.

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED DECEMBER 31, 1999)

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION*
-------- -------- ----------
<S> <C> <C> <C>
Investment Class............................................ 33.95% 33.76% 23.59%
Institutional Class......................................... 34.31% -- 37.51%
Wilshire 5000 Index......................................... 23.56% 27.06% 20.87%**
</TABLE>

* Inception date (commencement of investment operations): Investment Class -
September 30, 1992 and Institutional Class - July 15, 1996

** Beginning September 30, 1992

FEES AND EXPENSES OF THE LARGE COMPANY GROWTH PORTFOLIO

As a benefit of investing in the Portfolio, you do not incur any sales loads,
redemption fees or exchange fees. This table shows the fees and expenses you may
pay when you buy and hold Portfolio shares.

5
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
Management Fees............................................. 0.25% 0.25%
12b-1 Fee................................................... 0.25% None
Other Expenses.............................................. 0.34% 0.28%
------ ------
Total Portfolio Operating Expenses.......................... 0.84% 0.53%
</TABLE>

EXAMPLE:

This example helps you to compare the cost of investing in the Large Company
Growth Portfolio with the cost of investing in other mutual funds. The example
assumes: (i) you invest $10,000 for the periods shown, (ii) you reinvest all
dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
1 Year...................................................... $ 86 $ 54
3 Years..................................................... $ 268 $ 170
5 Years..................................................... $ 466 $ 296
10 Years.................................................... $1,037 $ 665
</TABLE>

--------------------------------------------------------------------------------

LARGE COMPANY VALUE PORTFOLIO

The bar chart and the performance table below provide an indication of the risks
of investing in the Large Company Value Portfolio by showing how Investment
Class Shares of the Large Company Value Portfolio have performed in the past and
by showing how the Portfolio's average annual total returns compare to those of
the Index. The chart and table assume reinvestment of dividends and
distributions. The Portfolio's past performance does not necessarily indicate
how it will perform in the future.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

TOTAL
RETURN

6
<PAGE>
During the period shown in the bar chart, the highest return for a quarter was
13.63% for the quarter ended December 31, 1998 and the lowest return for a
quarter was (14.20%) for the quarter ended September 30, 1999. The return for
the period from January 1, 2000 through September 30, 2000 was 10.86%.

The returns for the Portfolio's Investment Class Shares were slightly lower than
the Institutional Class Shares because Investment Class Shares pay Rule 12b-1
fees.

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIOD ENDED DECEMBER 31, 1999)

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION*
-------- -------- ----------
<S> <C> <C> <C>
Investment Class............................................ (6.81%) 17.20% 13.51%
Institutional Class......................................... (6.56%) -- 13.99%
Wilshire 5000 Index......................................... 23.56% 27.06% 20.87%**
</TABLE>

* Inception date (commencement of investment operations): Investment Class -
September 30, 1992 and Institutional Class - July 15, 1996

** Beginning September 30, 1992

FEES AND EXPENSES OF THE LARGE COMPANY VALUE PORTFOLIO

ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
Management Fees............................................. 0.25% 0.25%
12b-1 Fee................................................... 0.25% None
Other Expenses.............................................. 0.51% 0.49%
------ ------
Total Portfolio Operating Expenses.......................... 1.01% 0.74%
</TABLE>

EXAMPLE:

This example helps you to compare the cost of investing in the Large Company
Value Portfolio with the cost of investing in other mutual funds. The example
assumes: (i) you invest $10,000 for the periods shown, (ii) you reinvest all
dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
1 Year...................................................... $ 103 $ 76
3 Years..................................................... $ 322 $ 237
5 Years..................................................... $ 558 $ 411
10 Years.................................................... $1,236 $ 918
</TABLE>

7
<PAGE>
--------------------------------------------------------------------------------

SMALL COMPANY GROWTH PORTFOLIO

The bar chart and the performance table below provide an indication of the risks
of investing in the Small Company Growth Portfolio by showing how Investment
Class Shares of the Small Company Growth Portfolio have performed in the past
and by showing how the Portfolio's average annual total returns compare to those
of the Index. The chart and table assume reinvestment of dividends and
distributions. The Portfolio's past performance does not necessarily indicate
how it will perform in the future.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

TOTAL
RETURN

During the period shown in the bar chart, the highest return for a quarter was
20.75% for the quarter ended December 31, 1999 and the lowest return for a
quarter was (22.84%) for the quarter ended September 30, 1998. The return for
the period from January 1, 2000 through September 30, 2000 was 5.50%.

The returns for the Portfolio's Investment Class Shares were slightly lower than
the Institutional Class Shares because Investment Class Shares pay Rule 12b-1
fees.

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED DECEMBER 31, 1999)

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION*
-------- -------- ----------
<S> <C> <C> <C>
Investment Class............................................ 14.43% 12.48% 13.09%
Institutional Class......................................... 14.69% -- 10.10%
Wilshire 5000 Index......................................... 23.56% 27.06% 20.87%**
</TABLE>

* Inception date (commencement of investment operations): Investment Class -
September 30, 1992 and Institutional Class - July 15, 1996

** Beginning September 30, 1992

8
<PAGE>
FEES AND EXPENSES OF THE SMALL COMPANY GROWTH PORTFOLIO

ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
Management Fees+............................................ 0.25% 0.25%
12b-1 Fee................................................... 0.25% None
Other Expenses.............................................. 1.21% 1.18%
------ ------
Total Portfolio Operating Expenses+......................... 1.71% 1.43%
</TABLE>

+ The Adviser has agreed to waive a portion of its advisory fees until further
notice. After this waiver, Management Fees are expected to be 0.10% and Total
Portfolio Operating Expenses are expected to be 1.56% and 1.28% for the
Investment Class shares and Institutional Class shares, respectively.

EXAMPLE:

This example helps you to compare the cost of investing in the Small Company
Growth Portfolio with the cost of investing in other mutual funds. The example
assumes: (i) you invest $10,000 for the periods shown, (ii) reinvest all
dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
1 Year...................................................... $ 174 $ 146
3 Years..................................................... $ 539 $ 452
5 Years..................................................... $ 928 $ 782
10 Years.................................................... $2,019 $1,713
</TABLE>

9
<PAGE>
--------------------------------------------------------------------------------

SMALL COMPANY VALUE PORTFOLIO

The bar chart and the performance table below provide an indication of the risks
of investing in the Small Company Value Portfolio by showing how Investment
Class Shares of the Small Company Value Portfolio have performed in the past and
by showing how the Portfolio's average annual total returns compare to those of
the Index. The chart and table assume reinvestment of dividends and
distributions. The Portfolio's past performance does not necessarily indicate
how it will perform in the future.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

TOTAL
RETURN

During the period shown in the bar chart, the highest return for a quarter was
12.67% for the quarter ended June 30, 1997 and the lowest return for a quarter
was (16.05%) for the quarter ended September 30, 1998. The return for the period
from January 1, 2000 through September 30, 2000 was 0.90%.

The returns for the Portfolio's Investment Class Shares were slightly lower than
the Institutional Class Shares because Investment Class Shares pay Rule 12b-1
fees.

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIOD ENDED DECEMBER 31, 1999)

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION*
-------- -------- ----------
<S> <C> <C> <C>
Investment Class............................................ (12.20%) 9.18% 8.24%
Institutional Class......................................... (12.01%) -- 6.59%
Wilshire 5000 Index......................................... 23.56% 27.06% 20.87%**
</TABLE>

* Inception date (commencement of investment operations): Investment Class -
September 30, 1992 and Institutional Class - July 15, 1996

** Beginning September 30, 1992

10
<PAGE>
FEES AND EXPENSES OF THE SMALL COMPANY VALUE PORTFOLIO

ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
Management Fees+............................................ 0.25% 0.25%
12b-1 Fee................................................... 0.25% None
Other Expenses.............................................. 0.82% 0.85%
------ ------
Total Portfolio Operating Expenses+......................... 1.32% 1.10%
</TABLE>

+ The Adviser has agreed to waive a portion of its advisory fees until further
notice. After this waiver, Management Fees are expected to be 0.10%, and Total
Portfolio Operating Expenses are expected to be 1.17% and 0.95% for the
Investment Class shares and Institutional Class shares, respectively.

EXAMPLE:

This example helps you to compare the cost of investing in the Small Company
Value Portfolio with the cost of investing in other mutual funds. The example
assumes: (i) you invest $10,000 for the periods shown, (ii) you reinvest all
dividends and distributions in the Portfolio, (iii) you redeem all of your
shares at the end of the periods shown, (iv) your investment has a 5% annual
return, and (v) Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
1 Year...................................................... $ 134 $ 112
3 Years..................................................... $ 418 $ 350
5 Years..................................................... $ 723 $ 606
10 Years.................................................... $1,590 $1,340
</TABLE>

--------------------------------------------------------------------------------

WILSHIRE 5000 INDEX PORTFOLIO

There is no performance history for the Index Portfolio for the calendar year
ended December 31, 1999 since it had been operating for less than one year as of
December 31, 1999.

FEES AND EXPENSES OF THE WILSHIRE 5000 INDEX PORTFOLIO

11
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE
PORTFOLIO'S ASSETS):
(as a percentage of average daily net assets)

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
Management Fees+............................................ 0.10% 0.10%
12b-1 Fee................................................... 0.25% None
Other Expenses.............................................. 0.62% 0.62%
------ ------
Total Portfolio Operating Expenses.......................... 0.97% 0.72%
</TABLE>

+ The Adviser has agreed to waive all of its advisory fees until further notice.
After this waiver, Total Portfolio Operating Expenses are expected to be 0.87%
and 0.62% for the Investment Class Shares and the Institutional Class Shares,
respectively.

EXAMPLE:

This example helps you to compare the cost of investing in the Index Portfolio
with the cost of investing in other mutual funds. The example assumes: (i) you
invest $10,000 for the periods shown, (ii) you reinvest all dividends and
distributions in the Portfolio, (iii) you redeem all of your shares at the end
of the periods shown, (iv) your investment has a 5% annual return, and (v)
Portfolio operating expenses remain the same.

<TABLE>
<CAPTION>
INVESTMENT INSTITUTIONAL
CLASS CLASS
---------- -------------
<S> <C> <C>
1 Year...................................................... $ 99 $ 74
3 Years..................................................... $ 309 $230
5 Years..................................................... $ 536 $401
10 Years.................................................... $1,190 $894
</TABLE>

MORE INFORMATION ABOUT INVESTMENTS AND RISKS

STYLE PORTFOLIOS

Wilshire Target Funds, Inc. offers focused exposure to four distinct segments of
the U.S. market - large company growth, large company value, small company
growth and small company value. Each Style Portfolio owns only securities which
correspond to that style. Each Portfolio is described in more detail below.

In June of each year, Wilshire identifies the stocks of the 2,500 companies with
the largest market capitalizations from the Index. It divides those stocks into
two groups:

- LARGE COMPANIES are the 750 companies with the largest market
capitalizations. These companies were approximately 88% of the total
market value of the stocks included in the Index on June 30, 2000.

- SMALL COMPANIES are the 1,750 next largest companies based on market
capitalizations. These companies were approximately 9% of the total market
value of the stocks included in the Index on June 30, 2000.

12
<PAGE>
The remaining companies were less than 3% of the total market value of the
stocks included in the Index.

From these large and small capitalization universes, Wilshire then identifies
growth stocks and value stocks. To determine whether a company's stock is a
growth stock or a value stock, Wilshire analyzes fundamental factors such as
price to book value ratios, price to earnings ratios, earnings growth, dividend
pay-out ratios, return on equity, and the issuer's beta (a measure of a
company's stock price volatility relative to the market generally).

- VALUE COMPANIES have relatively low price to book value ratios, low price
to earnings ratios, and higher than average dividend payments in relation
to price.

- GROWTH COMPANIES have above average earnings or sales growth, above
average return on equity, and higher price to earnings ratios.

The number of securities eligible for investment by a Portfolio at any time
varies, but generally ranges from 150 to 500 stocks.

To maintain a proper style exposure in each Portfolio, the Adviser changes the
Portfolios' holdings as companies' characteristics change. The Adviser sells
stocks that no longer meet the criteria of a particular Style Portfolio. For
example, the Adviser may consider a stock to no longer be a value stock if its
price advances strongly.

The Adviser tries to maintain a fully invested position in the Portfolios at all
times. This means that the Portfolios hold little uninvested cash, thus ensuring
that you receive the full benefit of any market advances.

INDEX PORTFOLIO

The Index Portfolio provides exposure to the U.S. stock market as a whole by
investing primarily in the common stocks of companies included in the Wilshire
5000 Index. The Index is an unmanaged capitalization weighted index of over
7,000 U.S. equity securities and includes all the U.S. stocks regularly traded
on the New York Stock Exchange, the American Stock Exchange and the NASDAQ
over-the-counter market. The Index Portfolio does not hold all securities
included in the Index; it normally holds stocks securities representing at least
90% of the Index's total market value, which is between 2,000 and 3,000 stocks.

The Adviser manages the Index Portfolio using a "quantitative" or "indexing"
investment approach. It attempts to duplicate the performance of the Index
(before the deduction of Portfolio expenses) through statistical sampling
procedures. Wilshire does not use traditional methods of fund investment
management, such as selecting stocks based on financial analysis of individual
issuers and analysis of economic, industry and market trends. It selects stocks
based primarily on market capitalization and industry weightings.

Over time, Wilshire expects the correlation between the performance of the Index
and the Index Portfolio to be over 0.95 before the deduction of Portfolio
expenses. A correlation of 1.00 would indicate that the Index Portfolio's
performance exactly matched that of the Index. The Index Portfolio's ability to
track the Index's performance may be affected by factors such as the Portfolio's
expenses, changes in stocks represented in the Index, and the timing and amount
of sales and redemptions of Portfolio shares.

13
<PAGE>
TEMPORARY INVESTMENTS

During adverse market or economic conditions, or to meet large withdrawals, a
Portfolio temporarily may invest all or a part of its assets in defensive
investments. These investments include U.S. government securities and high
quality U.S. dollar-denominated money market securities, including certificates
of deposit, bankers' acceptances, commercial paper, short-term debt securities
and repurchase agreements. When following a defensive strategy a Portfolio will
be less likely to achieve its goal.

RISK INFORMATION

Investing in the Portfolios involves the following principal risks:

EQUITY RISK. The principal risk of investing in the Portfolios is equity risk.
This is the risk that the prices of stocks held by a Portfolio will change due
to general market and economic conditions, perceptions regarding the industries
in which the companies participate, and each company's particular circumstances.

INDEX RISK. There is a risk that the Index Portfolio's performance may not
match the Index exactly. Unlike the Index, the Index Portfolio incurs
administrative expenses and transaction costs in trading stocks. The Index
Portfolio does not hold every stock contained in the Index and there is a risk
that the performance of the stocks held in the Index Portfolio may not track
exactly the performance of the stocks held in the Index.

STYLE RISK. Another risk of investing in a Style Portfolio is the risk that the
style will perform poorly or fall out of favor with investors. For example, at
times the market may favor large capitalization stocks over small capitalization
stocks, value stocks over growth stocks, and vice versa.

14
<PAGE>
MANAGEMENT OF THE PORTFOLIOS

INVESTMENT ADVISER

Wilshire Associates Incorporated is the investment adviser for the Portfolios.
Wilshire is located at 1299 Ocean Avenue, Suite 700, Santa Monica, California
90401. It was formed in 1972 and as of October 30, 2000, managed approximately
$8.87 billion in assets. Wilshire makes all investment decisions for the
Portfolios.

The Portfolios paid Wilshire the advisory fees shown below during the last
fiscal year. Wilshire has agreed to waive all of its advisory fees for the Index
Portfolio until further notice. Wilshire has also agreed to reduce its advisory
fee for the Small Company Growth and Small Company Value Portfolios to 0.10%
until further notice.

<TABLE>
<CAPTION>
MANAGEMENT FEE AS A % OF AVERAGE
PORTFOLIO DAILY NET ASSETS OF THE PORTFOLIO
--------- ---------------------------------
<S> <C>
Large Company Growth Portfolio 0.25%
Large Company Value Portfolio 0.25%
Small Company Growth Portfolio 0.10%
Small Company Value Portfolio 0.10%
Wilshire 5000 Index Portfolio 0.00%
</TABLE>

SERVICE AND DISTRIBUTION PLAN

Each Portfolio has adopted a service and distribution plan for its Investment
Class Shares. The Plan authorizes payments by the Investment Class Shares
annually of up to 0.25% of the average daily net assets attributable to the
Portfolio's Investment Class Shares to finance distribution of those Shares and
services to their shareholders. Payments may be made under the Plan to
securities dealers and other financial intermediaries who provide services such
as answering shareholders' questions regarding their accounts, providing
shareholders with account statements and trade confirmations and forwarding
prospectuses and shareholder reports. Distribution expenses covered by the Plan
include marketing and advertising expenses and the costs of printing
prospectuses for prospective investors.

SHAREHOLDER INFORMATION

HOW TO BUY PORTFOLIO SHARES

You may buy shares without a sales charge on any day when the New York Stock
Exchange (NYSE) is open for business (referred to as a business day). We reserve
the right to reject any purchase order if we believe it is in a Portfolio's best
interest to do so. The Portfolios do not issue share certificates.

16
<PAGE>
MINIMUM INVESTMENTS

The minimum initial investments in a Portfolio are as follows:

- Investment Class Shares. The minimum initial investment in each Style
Portfolio is $2,500, or $1,000 if you are a client of a securities dealer,
bank or other financial institution which has made an aggregate minimum
initial purchase for its customers of at least $2,500. The minimum initial
investment in the Index Portfolio is $1,000. Subsequent investments must be at
least $100. The minimum investments do not apply to certain employee benefit
plans.

- Institutional Class Shares. The minimum initial investment is $250,000.
Subsequent investments must be at least $100,000

Your initial investment must be accompanied by an Account Application. You may
obtain an Account Application by calling 1-888-200-6796. We may waive or change
investment minimum requirements at any time.

You may purchase shares through your financial advisor or brokerage account
simply by telling your advisor or broker that you wish to purchase shares of a
Portfolio. Your advisor or broker will then transmit a purchase order and
payment to the Portfolio on your behalf. Your advisor or broker may require a
different minimum investment or impose additional limitations on buying and
selling shares.

You also may purchase shares directly from us as follows:

(1) CHECKS. Checks should be made payable to "WILSHIRE TARGET FUNDS, INC." For
subsequent investments, your Portfolio account number should appear on the
check. Payments should be mailed to:

Wilshire Target Funds, Inc.
P.O. Box 60488
King of Prussia, Pennsylvania
19406-0488

Include your investment slip or, when opening a new account, your Account
Application, indicating the name of the Portfolio. No investments may be made by
third party checks.

17
<PAGE>
(2) WIRE PAYMENTS. You can pay by wire if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Send immediately available funds by wire
to:

Boston Safe Deposit and Trust Company (ABA #011001234)
[Portfolio Name]
DDA #065-587
(Portfolio Account No. or Taxpayer Identification No. for new accounts)
Dealer No., if applicable

If your initial purchase of Portfolio shares is by wire, please call
1-888-200-6796 after completing your wire payment to obtain your Portfolio
account number. Please include your Portfolio account number on the Account
Application and promptly mail the Account Application to us, as no redemptions
will be permitted until the Account Application is received.

(3) ACCUMULATION PLAN (INVESTMENT CLASS SHARES ONLY). The Accumulation Plan
permits you to purchase shares (minimum of $100 per transaction) at regular
intervals. This may be a convenient way for you to invest for long-term and
intermediate financial goals. Shares are purchased by electronically
transferring funds from the bank account you designate. Your bank account will
be debited in a specified amount, and shares will be purchased once a month, on
either the first or fifteenth day, or twice a month, on both days, however you
designate. You may only designate an account maintained at a domestic financial
institution which is an Automated Clearing House member. To establish an
Accumulation Plan account, you must file an authorization form with us. You may
obtain the necessary authorization form by calling 1-888-200-6796. You may
cancel your participation in the Accumulation Plan or change the amount of
purchase at any time by mailing written notification to Wilshire Target Funds,
Inc., P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488. The notification
will be effective three business days after we receive it.

(4) ELECTRONIC FUNDS TRANSFER. You may make subsequent investments (minimum of
$100 per transaction) by electronic transfer of funds from an account maintained
in a bank or other domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit immediately available
funds through the Automated Clearing House to:

Boston Safe Deposit and Trust Company
[Fund Name]
[Shareholder Account Number]
Account of [Registered Shareholder]

HOW TO SELL PORTFOLIO SHARES

You may sell your shares back to a Portfolio (known as redeeming shares) on any
business day without a redemption fee. A Portfolio may temporarily stop
redeeming its shares when the NYSE is closed or trading on the NYSE is
restricted, when an emergency exists and the Portfolio cannot sell its shares or
accurately determine the value of its assets, or if the Securities and Exchange
Commission orders the Portfolio to suspend redemptions. We reserve the right to
impose a redemption fee in the future.

18
<PAGE>
You may redeem your shares in a Portfolio as follows:

(A) BY TELEPHONE. You may redeem your shares by telephone if you have checked
the appropriate box on your Account Application or you have filed a Shareholder
Services Form with us authorizing telephone redemption. Call 1-888-200-6796 with
your account number, the amount of redemption and instructions as to how you
wish to receive your funds.

1. Telephone Redemption by Check. We will make checks payable to the name
in which the account is registered and normally will mail the check to
you at your address of record within seven days after we receive your
request. Any request for redemption proceeds to be sent to the address of
record must be in writing with the signature guaranteed if made within 60
days of changing your address.

2. Telephone Redemption by Wire. We accept telephone requests for wire
redemptions of at least $1,000 per Portfolio. We will send a wire to
either a bank designated on your Account Application or on a subsequent
letter with a guaranteed signature. Your designated bank must be a member
of the Federal Reserve system or a correspondent bank. We normally wire
proceeds on the next business day after we receive your request.

(B) BY MAIL. You may also redeem your shares by mailing a request to: Wilshire
Target Funds, Inc., P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488. We
normally will mail a check to you at your address of record within seven days
after we receive your request. Your letter should state the name of the
Portfolio and the share class, the dollar amount or number of shares you are
redeeming, and your account number. You must sign the letter in exactly the same
way the account is registered and if there is more than one owner of shares, all
owners must sign. We require a signature guarantee for each signature on your
redemption letter if you redeem more than $50,000, or if proceeds are to be paid
to someone other than the registered holder of shares or if the investor's
address of record has changed within the past 60 days.

SIGNATURE GUARANTEES. If a signature guarantee is required you must have a
medallion signature guarantee from an eligible guarantor (a notarized signature
is not sufficient). You can obtain a medallion signature guarantee from a
domestic bank or trust company, broker dealer, clearing agency, savings
association, or other financial institution which participates in a medallion
program recognized by the Securities Transfer Association. The three recognized
medallion programs are Securities Transfer Agents Medallion Program (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange Inc.
Medallion Signature Program (NYSE MSP). Signature guarantees from financial
institutions which are not participating in one of these programs will not be
accepted.

INVOLUNTARY REDEMPTION. We may redeem all shares in your account if their value
falls below $500, in the case of Investment Class shares, or $150,000, in the
case of Institutional Class shares, as a result of redemptions (but not as a
result of a decline in their net asset value). We will notify you in writing and
give you 45 days to increase the value of your account to at least $500, in the
case of Investment Class shares, and $150,000, in the case of Institutional
Class shares.

19
<PAGE>
the check clears, your shares will be valued at the next determined net asset
value after we receive your redemption order.

We may pay your redemption proceeds wholly or partly in securities. This would
happen only in the rare instance that the Wilshire Target Funds Board of
Directors believes it would be in a Portfolio's best interest not to pay
redemption proceeds in cash. When you sell these securities you will pay
brokerage commissions.

TELEPHONE TRANSACTIONS. If you authorize telephone transactions, bear in mind
that you may be responsible for any fraudulent telephone transaction in your
account so long as Wilshire Target Funds, Inc. and its service providers follow
reasonable procedures to protect against unauthorized transactions. All
telephone calls are recorded for your protection and you will be asked for
information to verify your identification. You may have difficulty reaching us
by telephone to request a redemption of your shares. In that case you may mail
your redemption request to the address stated above.

PRICING OF SHARES

When you purchase shares of either class of a Portfolio, the price you pay per
share is the "net asset value" of the shares next determined after we receive
your purchase order. Similarly, the price you receive when you redeem your
shares is the net asset value of the shares next determined after we receive
your redemption request. We calculate the net asset value per share of each
class of each Portfolio at the close of business on the NYSE on each business
day. Net asset value per share of a class of shares is calculated by adding the
value of the individual securities held by a Portfolio and attributable to the
class, subtracting the liabilities of that class, and dividing by the total
number of the shares of that class outstanding. We value each individual
security a Portfolio holds by using market quotations; if a market quotation is
not available a fair value is determined by or under the direction of the Board
of Directors of Wilshire Target Funds.

HOW TO EXCHANGE PORTFOLIO SHARES

You may exchange your shares in a Portfolio for shares of the same class of
another Portfolio. You also may exchange shares of one class for shares of
another class of the same Portfolio, provided you meet the eligibility
requirements (including minimum investment amounts) for purchase. In addition,
you can also exchange shares of a Portfolio for shares of the American Advantage
Money Market Fund, provided you meet the eligibility requirements for its
purchase. Note that exchanges from one Portfolio to another Portfolio are
taxable transactions while exchanges from one class to another class of the same
Portfolio are not taxable transactions.

You may exchange shares through your financial advisor or broker or directly
through Wilshire Target Funds, Inc. as follows:

(A) BY MAIL. You may make an exchange by writing to us at Wilshire Target Funds,
Inc., P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488. Your letter
should state the name of the Portfolio and share

20
<PAGE>
class you are exchanging, the number of shares you are exchanging and the name
of the Portfolio and share class you are acquiring, as well as your name,
account number and taxpayer identification or social security number.

(B) BY TELEPHONE. Call us at 1-888-200-6796 and give us the information stated
above under "By Mail". To exchange shares by telephone, you must have authorized
telephone exchanges on your Account Application or have filed a Shareholder
Services Form with us authorizing telephone exchanges.

- Shares will be exchanged at their net asset value next determined after we
receive your exchange request.

- We reserve the right to reject any exchange request in whole or in part.

- We may modify or terminate the availability of exchanges at any time with
notice to shareholders.

- You should read the prospectus of the Portfolio whose shares you are
acquiring.

RETIREMENT PLANS

Wilshire Target Funds, Inc. offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts" and
403(b)(7) Plans. Plan support services also are available. To obtain details
please call 1-888-200-6796.

DIVIDEND AND DISTRIBUTION INFORMATION

Each Portfolio intends to pay any dividends and capital gain distributions at
least once a year. You may have dividends or capital gains distributions of a
Portfolio automatically reinvested at net asset value in additional shares of
the Portfolio. You will make an election to receive dividends and distributions
in cash or shares at the time you purchase your shares. You may change this
election by notifying us in writing at any time before the record date for a
particular dividend or distribution. There are no sales or other charges for the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that a Portfolio will pay any
dividends or realize any capital gains. Dividends and distributions may differ
for different classes of a Portfolio.

TAX INFORMATION

We expect that each Portfolio's distributions will consist primarily of net
investment income and capital gains, which may be taxable at different rates
depending on the length of time the Portfolio holds its assets. Dividends out of
net investment income and distributions of realized short-term capital gains are
taxable to you as ordinary income. Distributions of net long-term capital gains
are taxable to you at long-term capital gain rates. A Portfolio's distributions
may be subject to federal, state or local taxes whether you receive them in cash
or reinvest them in additional shares of the Portfolio. An exchange of

21
<PAGE>
a Portfolio's shares for shares of another Portfolio will be treated for tax
purposes as a sale of the Portfolio's shares, and any gain you realize on the
exchange may be taxable. Foreign shareholders may be subject to special
withholding requirements.

This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in a Portfolio.

22
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the
financial performance of the Portfolios' shares for the past five years (or for
the period since a particular Portfolio began operations or a particular class
of shares was first offered). Certain information reflects the financial
performance of a single share. The total returns in each table represent the
rate that an investor would have earned or lost on an investment in a Portfolio
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the
Portfolios' financial statements and related notes, are included in the annual
report, which is available on request.

LARGE COMPANY GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH YEAR.

<TABLE>
<CAPTION>
INVESTMENT CLASS SHARES
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $ 36.37 $ 26.09 $ 23.92 $ 19.35 $ 16.34
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment gain/(loss).................................. (0.12)*** (0.05) 0.04 0.04*** 0.07
Net realized and unrealized gain on investments............. 10.55 12.30 2.71 7.29 3.45
-------- -------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 10.43 12.25 2.75 7.33 3.52
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ -- (0.02) (0.06) (0.03) (0.12)
Distributions from capital gains............................ (0.44) (1.95) (0.52) (2.73) (0.39)
-------- -------- ------- ------- -------
TOTAL DISTRIBUTIONS......................................... (0.44) (1.97) (0.58) (2.76) (0.51)
-------- -------- ------- ------- -------
Net asset value, end of year................................ $ 46.36 $ 36.37 $ 26.09 $ 23.92 $ 19.35
======== ======== ======= ======= =======
Total return (a)............................................ 28.84% 48.46% 11.61% 40.91% 21.90%
======== ======== ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's).......................... $656,711 $454,853 $81,569 $73,480 $19,035
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 0.83% 0.90% 0.71% 0.81% 0.93%
Operating expenses excluding custody earnings credit........ 0.84% 0.95% 0.73% 0.91% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 0.84% 0.95% 0.77% 1.09% 0.96%
Net investment income including reimbursement/waiver/custody
earnings credit............................................ (0.28)% (0.11)% 0.16% 0.20% 0.39%
Portfolio turnover rate..................................... 50% 35% 57% 43% 44%
</TABLE>

------------------------------
*** The selected per share data was calculated using the weighted average shares
outstanding method for the year.
(a) Total return represents aggregate total return for the period indicated.

23
<PAGE>
LARGE COMPANY GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD
----------------------------------------- ENDED
2000 1999 1998 1997 8/31/96(1)
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 36.47 $ 26.12 $ 23.91 $ 19.35 $ 18.27
-------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.01*** 0.03 0.08 0.05*** 0.01
Net realized and unrealized gain on investments............. 10.59 12.31 2.72 7.29 1.07
-------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 10.60 12.34 2.80 7.34 1.08
-------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ -- (0.04) (0.07) (0.05) --
Distributions from capital gains............................ (0.44) (1.95) (0.52) (2.73) --
-------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS......................................... (0.44) (1.99) (0.59) (2.78) --
Net asset value, end of period.............................. $ 46.63 $ 36.47 $ 26.12 $ 23.91 $ 19.35
======== ======= ======= ======= =======
Total return (a)............................................ 29.23% 48.81% 11.78% 40.99% 5.91%**
======== ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................ $149,043 $72,773 $34,993 $41,881 $ 7,763
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 0.52% 0.62% 0.60% 0.78% 0.91%*
Operating expenses excluding custody earnings credit........ 0.53% 0.67% 0.62% 0.87% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 0.53% 0.67% 0.66% 1.06% 0.94%*
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 0.03% 0.18% 0.27% 0.23% 0.41%*
Portfolio turnover rate..................................... 50% 35% 57% 43% 44%**
</TABLE>

------------------------------
* Annualized.
** Non-annualized.
*** The selected per share data was calculated using the weighted average shares
outstanding method for the year.
(1) Large Company Growth Portfolio Institutional Class commenced operations on
July 15, 1996.
(a) Total return represents aggregate total return for the period indicated.

24
<PAGE>
LARGE COMPANY VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH YEAR.

<TABLE>
<CAPTION>
INVESTMENT CLASS SHARES
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $ 21.02 $ 19.29 $ 20.49 $ 17.80 $ 16.02
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.28*** 0.28 0.38 0.47*** 0.85
Net realized and unrealized gain on investments............. (0.02) 3.32 0.01 5.13 1.91
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 0.26 3.60 0.39 5.60 2.76
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ (0.31) (0.33) (0.38) (0.60) (0.47)
Distributions from capital gains............................ (1.06) (1.54) (1.21) (2.31) (0.51)
------- ------- ------- ------- -------
Total distributions......................................... (1.37) (1.87) (1.59) (2.91) (0.98)
------- ------- ------- ------- -------
Net asset value, end of year................................ $ 19.91 $ 21.02 $ 19.29 $ 20.49 $ 17.80
======= ======= ======= ======= =======
Total return (a)............................................ 1.71% 18.78% 1.34% 34.27% 17.52%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's).......................... $21,490 $19,814 $13,055 $13,989 $17,960
Operating expenses including reimbursement/waiver/custody
earnings
credit..................................................... 0.98% 1.04% 0.83% 0.91% 0.89%
Operating expenses excluding custody earnings credit........ 1.01% 1.06% 0.86% 0.96% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 1.01% 1.06% 0.91% 1.18% 0.92%
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 1.51% 1.58% 1.88% 2.51% 3.12%
Portfolio turnover rate..................................... 110% 57% 56% 65% 56%
</TABLE>

25
<PAGE>
LARGE COMPANY VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD
----------------------------------------- ENDED
2000 1999 1998 1997 8/31/96(1)
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 21.04 $ 19.29 $ 20.47 $ 17.80 $ 17.19
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.33*** 0.37 0.41 0.47*** 0.07
Net realized and unrealized gain on investments............. (0.01) 3.28 0.01 5.13 0.54
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 0.32 3.65 0.42 5.60 0.61
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ (0.37) (0.36) (0.39) (0.62) --
Distributions from capital gains............................ (1.06) (1.54) (1.21) (2.31) --
------- ------- ------- ------- -------
Total distributions......................................... (1.43) (1.90) (1.60) (2.93) --
------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 19.93 $ 21.04 $ 19.29 $ 20.47 $ 17.80
======= ======= ======= ======= =======
Total return (a)............................................ 2.06% 19.05% 1.47% 34.26% 3.55%**
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................ $58,566 $56,719 $46,017 $49,334 $17,425
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 0.71% 0.77% 0.73% 0.91% 0.87%*
Operating expenses excluding custody earnings credit........ 0.74% 0.79% 0.76% 0.96% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 0.74% 0.79% 0.81% 1.18% 0.90%*
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 1.78% 1.86% 1.98% 2.51% 3.14%*
Portfolio turnover rate..................................... 110% 57% 56% 65% 56%**
</TABLE>

------------------------------
* Annualized.
** Non-annualized.
*** The selected per share data was calculated using the weighted average shares
outstanding method for the year.
(1) Large Company Value Portfolio Institutional Class Shares commenced
operations of July 15, 1996.
(a) Total return represents aggregate total return for the period indicated.

26
<PAGE>
SMALL COMPANY GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH YEAR.

<TABLE>
<CAPTION>
INVESTMENT CLASS SHARES
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $13.34 $ 11.78 $ 16.61 $ 18.56 $ 18.55
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss......................................... (0.21)*** (0.57) (0.18) (0.17)*** (0.19)
Net realized and unrealized gain/(loss) on investments...... 4.67 3.01 (3.98) 2.38 3.06
------ ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 4.46 2.44 (4.16) 2.21 2.87
------ ------- ------- ------- -------
LESS DISTRIBUTIONS:
Distributions from capital gains............................ -- (0.88) (0.67) (4.16) (2.86)
------ ------- ------- ------- -------
Total distributions......................................... -- (0.88) (0.67) (4.16) (2.86)
------ ------- ------- ------- -------
Net asset value, end of year................................ $17.80 $ 13.34 $ 11.78 $ 16.61 $ 18.56
====== ======= ======= ======= =======
Total return (a)............................................ 33.43% 20.79% (26.02)% 15.16% 17.50%
====== ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's).......................... $8,871 $ 8,907 $ 9,659 $14,471 $18,049
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 1.52% 1.46% 1.26% 1.22% 1.01%
Operating expenses excluding custody earnings credit........ 1.56% 1.50% 1.28% 1.24% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 1.71% 1.65% 1.43% 1.45% 1.05%
Net investment income including reimbursement/waiver/custody
earnings credit............................................ (1.36)% (1.20)% (1.05)% (1.05)% (0.78)%
Portfolio turnover rate..................................... 127% 153% 74% 105% 87%
</TABLE>

27
<PAGE>
SMALL COMPANY GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD
----------------------------------------- ENDED
2000 1999 1998 1997 8/31/96(1)
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $13.38 $ 11.79 $ 16.61 $ 18.56 $ 16.66
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss......................................... (0.17)*** (0.54) (0.17) (0.17)*** (0.02)
Net realized and unrealized gain/(loss) on investments...... 4.70 3.01 (3.98) 2.38 1.92
------ ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ 4.53 2.47 (4.15) 2.21 1.90
------ ------- ------- ------- -------
LESS DISTRIBUTIONS:
Distributions from capital gains............................ -- (0.88) (0.67) (4.16) --
------ ------- ------- ------- -------
Total distributions......................................... -- (0.88) (0.67) (4.16) --
------ ------- ------- ------- -------
Net asset value, end of period.............................. $17.91 $ 13.38 $ 11.79 $ 16.61 $ 18.56
====== ======= ======= ======= =======
Total return (a)............................................ 33.86% 21.04% (25.95)% 15.14% 11.40%**
====== ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................ $6,802 $ 5,011 $ 4,054 $ 4,599 $ 3,577
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 1.24% 1.27% 1.17% 1.22% 0.98%*
Operating expenses excluding custody earnings credit........ 1.28% 1.31% 1.19% 1.24% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 1.43% 1.46% 1.34% 1.45% 1.02%*
Net investment income/(loss) including
reimbursement/waiver/custody earnings credit............... (1.08)% (1.01)% (0.96)% (1.05)% (0.75)%*
Portfolio turnover rate..................................... 127% 153% 74% 105% 87%**
</TABLE>

------------------------------
* Annualized.
** Non-annualized.
*** The selected per share data was calculated using the weighted average shares
outstanding method for the year.
(1) Small Company Growth Portfolio Institutional Class Shares commenced
operations of July 15, 1996.
(a) Total return represents aggregate total return for the period indicated.

28
<PAGE>
SMALL COMPANY VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH YEAR.

<TABLE>
<CAPTION>
INVESTMENT CLASS SHARES
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $13.60 $ 13.77 $ 17.25 $ 15.92 $ 15.41
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.18*** 0.09 0.36 0.40*** 0.56
Net realized and unrealized gain/(loss) on investments...... (0.98) 0.79 (1.50) 4.27 0.95
------ ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ (0.80) 0.88 (1.14) 4.67 1.51
------ ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ (0.24) (0.19) (0.37) (0.75) (0.56)
Distributions from capital gains............................ (0.25) (0.86) (1.97) (2.59) (0.44)
------ ------- ------- ------- -------
Total distributions......................................... (0.49) (1.05) (2.34) (3.34) (1.00)
------ ------- ------- ------- -------
Net asset value, end of year................................ $12.31 $ 13.60 $ 13.77 $ 17.25 $ 15.92
====== ======= ======= ======= =======
Total return (a)............................................ (5.83)% 6.20% (8.79)% 33.73% 10.01%
====== ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA:
Net assets, end of year (in 000's).......................... $7,332 $26,395 $17,602 $20,299 $27,329
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 1.15% 1.02% 0.83% 0.86% 0.88%
Operating expenses excluding custody earnings credit........ 1.17% 1.08% 0.85% 0.90% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 1.32% 1.23% 1.00% 1.15% 0.92%
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 1.51% 1.71% 1.61% 2.58% 3.13%
Portfolio turnover rate..................................... 94% 113% 74% 105% 81%
</TABLE>

29
<PAGE>
SMALL COMPANY VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD
----------------------------------------- ENDED
2000 1999 1998 1997 8/31/96(1)
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 13.61 $ 13.76 $ 17.23 $ 15.92 $ 15.45
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... 0.21*** 0.14 0.38 0.40*** 0.06
Net realized and unrealized gain/(loss) on investments...... (0.99) 0.77 (1.50) 4.27 0.41
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............................ (0.78) 0.91 (1.12) 4.67 0.47
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income........................ (0.27) (0.20) (0.38) (0.77) --
Distributions from capital gains............................ (0.25) (0.86) (1.97) (2.59) --
------- ------- ------- ------- -------
Total distributions......................................... (0.52) (1.06) (2.35) (3.36) --
======= ======= ======= ======= =======
Net asset value, end of period.............................. $ 12.31 $ 13.61 $ 13.76 $ 17.23 $ 15.92
======= ======= ======= ======= =======
Total return (a)............................................ (5.61)% 6.43% (8.72)% 33.74% 3.04%**
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................ $11,739 $11,627 $10,454 $26,412 $ 7,335
Operating expenses including reimbursement/waiver/custody
earnings credit............................................ 0.93% 0.79% 0.74% 0.86% 0.85%*
Operating expenses excluding custody earnings credit........ 0.95% 0.85% 0.76% 0.90% --
Operating expenses excluding reimbursement/waiver/custody
earnings credit............................................ 1.10% 1.00% 0.91% 1.15% 0.89%*
Net investment income including reimbursement/waiver/custody
earnings credit............................................ 1.73% 1.94% 1.70% 2.58% 3.16%*
Portfolio turnover rate..................................... 94% 113% 74% 105% 81%**
</TABLE>

------------------------------
* Annualized.
** Non-annualized.
*** The selected per share data was calculated using the weighted average shares
outstanding method for the year.
(1) Small Company Value Portfolio Institutional Class Shares commenced
operations of July 15, 1996.
(a) Total return represents aggregate total return for the period indicated.

30
<PAGE>
WILSHIRE 5000 INDEX PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
INVESTMENT CLASS SHARES INSTITUTIONAL CLASS SHARES
--------------------------- ---------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
8/31/00 8/31/99(1) 8/31/00 8/31/99(1)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 10.32 $ 10.00 $ 10.33 $ 10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................. 0.06*** 0.02 0.10*** 0.03
Net realized and unrealized gain on investments........ 1.91 0.30 1.91 0.30
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS....................... 1.97 0.32 2.01 0.33
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income................... (0.04) -- (0.07) --
Distributions from capital gains....................... (0.02) -- (0.02) --
------- ------- ------- -------
Total distributions.................................... (0.06) -- (0.09) --
------- ------- ------- -------
Net asset value, end of period......................... $ 12.23 $ 10.32 $ 12.25 $ 10.33
======= ======= ======= =======
Total return (a)....................................... 19.14% 3.20%** 19.45% 3.30%**
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................... $85,704 $99,986 $17,651 $ 183
Operating expenses including
reimbursement/waiver/custody earnings credit.......... 0.60% 0.60%* 0.35% 0.35%*
Operating expenses excluding custody earnings credit... 0.62% 0.69%* 0.37% 0.48%*
Operating expenses excluding
reimbursement/waiver/custody earnings credit.......... 0.97% 1.33%* 0.72% 1.32%*
Net investment income including reimbursement/waiver/
custody earnings credit............................... 0.54% 0.60%* 0.79% 1.20%*
Portfolio turnover rate................................ 61% 4%** 61% 4%**
</TABLE>

------------------------------
* Annualized
** Non-annualized.
(1) The Wilshire 5000 Index Portfolio Investment Class and Institutional Class
Shares commenced operations on February 1, 1999.
(a) Total return represents aggregate total return for the period indicated.

31
<PAGE>
(This page left blank intentionally.)

32
<PAGE>

WILSHIRE TARGET FUNDS, INC.

WILSHIRE 5000 INDEX PORTFOLIO

QUALIFIED CLASS SHARES

STATEMENT OF ADDITIONAL INFORMATION
(http://www.wilfunds.com)

DECEMBER 20, 2000

This Statement of Additional Information ("SAI") provides supplementary
information for the Qualified Class shares of the Wilshire 5000 Index Portfolio
series (the "Portfolio") of Wilshire Target Funds, Inc. (the "Company").

This Statement of Additional Information is not a prospectus, and it
should be read in conjunction with the prospectus for the Portfolio dated
December 20, 2000. You can obtain the Portfolio's prospectus by contacting
us at: Wilshire Target Funds, Inc., P.O. Box 60488, King of Prussia,
Pennsylvania 19406-0488, 888-200-6796.

TABLE OF CONTENTS

The Portfolio............................................................. 2
Investment Policies and Risks............................................. 2
Investment Restrictions................................................... 8
Directors and Officers.................................................... 9
Principal Holders of Securities........................................... 12
Investment Advisory and Other Services.................................... 13
Code of Ethics............................................................ 16
Portfolio Transactions.................................................... 16
Net Asset Value........................................................... 17
Purchase and Redemption of Shares......................................... 18
Dividends, Distribution and Taxes......................................... 19
Performance Information................................................... 21
Other Information......................................................... 22
Financial Statements....................................................... 23

1
<PAGE>

THE PORTFOLIO

The Company is a diversified, open-end investment management company that
currently offers shares of a number of series and classes, including Qualified
Class shares for the Wilshire 5000 Index Portfolio. The Company also offers
other classes of shares of the Wilshire 5000 Index Portfolio in separate
prospectuses.

You cannot invest in Qualified Class shares directly. Instead, you can
participate through a variable annuity contract ("Contract") purchased by your
employer from an insurance company ("Insurer") with which the Portfolio has
entered into an agreement. Most often employers enter into these Contracts so
they can offer their employees a way to save for retirement. Retirement Plans
sponsored by employers may be entitled to tax benefits to which individual
retirement plans may not be entitled. These tax benefits are fully explained in
your employer's Contract disclosure document. Once you are invested in Qualified
Class shares of the Portfolio, you participate in Portfolio earnings or losses
in proportion to the amount of money you invest. Depending on your employer's
Contract, if you withdraw your money before retirement, you may incur charges
and additional tax liabilities. However, to save for retirement, you generally
should let your investments and their earnings build. At retirement, you may
withdraw all or a portion of your money, leave it in the account until you need
it, or start receiving annuity payments. At a certain age you may be required to
begin withdrawals. Holders of Contracts ("Contract Owners") should consider
their investment objectives and tolerance for risk when making an investment
decision. The Portfolio's net asset value is not fixed and should be expected to
fluctuate. You should consider the Portfolio as a supplement to an overall
investment program and should invest only if you are willing to undertake the
risks involved.

INVESTMENT POLICIES AND RISKS

The Portfolio may invest in the investments described below:

U.S. GOVERNMENT SECURITIES. The Portfolio may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, which
include U.S. Treasury securities of various interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities are supported by the full faith and credit of
the U.S. Treasury. Others are supported by the right of the issuer to borrow
from the Treasury, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality, or by the
credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.

MONEY MARKET INSTRUMENTS. The Portfolio may invest in money market instruments,
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations issued by domestic banks, foreign subsidiaries or
branches of domestic banks, domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking institutions.

A certificate of deposit is a negotiable certificate requiring a bank to repay
funds deposited with it for a specified period of time.

2
<PAGE>

A time deposit is a non-negotiable deposit maintained in a banking institution
for a specified period of time at a stated interest rate. The Portfolio will
only invest in time deposits of domestic banks that have total assets in excess
of one billion dollars. Time deposits held by the Portfolio will not benefit
from insurance administered by the Federal Deposit Insurance Corporation.

A bankers' acceptance is a credit instrument requiring a bank to pay a draft
drawn on it by a customer. These instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument upon maturity.
Other short-term bank obligations in which the Portfolio may invest may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.

With respect to such securities issued by foreign branches and subsidiaries of
domestic banks, and domestic and foreign branches of foreign banks, the
Portfolio may be subject to additional investment risks that are different in
some respects from those incurred by the Portfolio which invests only in debt
obligations of U.S. domestic issuers. Such risks include possible future
political and economic developments, possible seizure or nationalization of
foreign deposits, the possible imposition of foreign withholding taxes on
interest income, the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which may adversely affect the
payment of principal and interest on these securities.

REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and price
(usually within seven days). The repurchase agreement thus determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. A repurchase
agreement involves risks in the event of a default or insolvency of the other
party to the agreement, including possible delays or restrictions upon the
Portfolio's ability to dispose of the underlying securities. The Company's
custodian or sub-custodian will hold in a segregated account the securities
acquired by the Portfolio under a repurchase agreement. Repurchase agreements
are considered, under the Investment Company Act of 1940, as amended (the "1940
Act"), to be loans by the Portfolio. To try to reduce the risk of loss on a
repurchase agreement, the Portfolios will enter into repurchase agreements only
with domestic banks with total assets in excess of one billion dollars, only
with respect to securities of the type in which the Portfolio may invest, and
will require that additional securities be deposited with the custodian or
sub-custodian if the value of the securities purchased decreases below the
repurchase price.

LENDING PORTFOLIO SECURITIES. The Portfolio may seek additional income by
lending its securities on a short-term basis to banks, brokers and dealers under
agreement. The Portfolio may return a portion of the interest earned to the
borrower or a third party which is unaffiliated with the Company and acting as a
"placing broker."

The Securities and Exchange Commission (the "SEC") currently requires that the
following lending conditions must be met: (1) the Portfolio must receive at
least 100% collateral from the borrower (cash, U.S. Government securities, or
irrevocable bank letters of credit); (2) the borrower must increase the
collateral whenever the market value of the loaned securities rises above the
level of such collateral; (3) the Portfolio must be able to terminate the loan
at any time; (4) the Portfolio must receive reasonable interest on the loan, as
well as any dividends, interest or other distributions payable on the loaned
securities, and any increase in market value; (5) the Portfolio may pay only
reasonable custodian fees in connection with the loan; and (6) while voting
rights on the loaned securities may pass to the borrower, the Company's Board of

3
<PAGE>

Directors must be able to terminate the loan and regain the right to vote the
securities if a material event adversely affecting the investment occurs.

Even though loans of portfolio securities are collateralized, a risk of loss
exists if an institution that borrows securities from the Portfolio breaches its
agreement with the Portfolio and the Portfolio is delayed or prevented from
recovering the collateral.

COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial
paper is a short-term, unsecured promissory note issued to finance short-term
credit needs. The commercial paper purchased by the Portfolio will consist
only of direct obligations which, at the time of their purchase, are (a)
rated at least Prime-1 by Moody's Investors Service, Inc., A-1 by Standard &
Poor's Ratings Group, F-1 by Fitch Investors Service, L.P. or D-1 by Duff &
Phelps Credit Rating Co.; (b) issued by companies having an outstanding
unsecured debt issue rated at least Aa3 by Moody's Investors Service, Inc. or
AA- by Standard & Poor's Ratings Group, Fitch Investors Service, L.P. or Duff
& Phelps Credit Rating Co.; or (c) if unrated, determined by the Company to
be of comparable quality.

These instruments include variable amount master demand notes, which are
obligations that permit the Portfolio to invest at varying rates of interest
pursuant to direct arrangements between the Portfolio, as lender, and the
borrower. These notes permit daily changes in the amounts borrowed. Because they
are direct lending arrangements between the lender and borrower, such
instruments generally will not be traded, and there generally is no established
secondary market for these obligations, although they are redeemable at face
value, plus accrued interest, at any time. If these obligations are not secured
by letters of credit or other credit support arrangements, the Portfolio's right
to redeem its investment depends on the ability of the borrower to pay principal
and interest on demand. In connection with floating and variable rate demand
obligations, Wilshire will consider, on an ongoing basis, earning power, cash
flow and other liquidity ratios of the borrower, and the borrower's ability to
pay principal and interest on demand. Such obligations frequently are not rated
by credit rating agencies, and the Portfolio may invest in them only if at the
time of an investment the borrower meets the criteria set forth above for other
commercial paper issuers.

DERIVATIVES. The Portfolio may invest, to a limited extent, in "derivatives."
These are financial instruments which derive their performance at least in part,
from the performance of an underlying asset, index or interest rate. The
derivatives the Portfolio uses are currently comprised of stock index futures
and options. The Portfolio may invest in derivatives for a variety of reasons,
including to hedge against certain market risks, to provide a substitute for
purchasing or selling particular securities or to increase potential income
gain. Derivatives may provide a cheaper, quicker or more specifically focused
way for the Portfolio to invest than "traditional" securities.

Although the Portfolio does not currently intend to invest in derivatives, it
reserves the right to do so in the future. Normally, less than 5% of the
Portfolio's net assets would be invested in derivatives.

4
<PAGE>

Derivatives permit the Portfolio to increase, decrease or change the level of
risk to which its securities are exposed in much the same way as the Portfolio
can increase, decrease or change the risk of its investments by making
investments in specific securities. However, derivatives can be volatile and
involve various types and degrees of risk, depending upon the characteristics of
the particular derivative and the Portfolio as a whole. Under certain market
conditions, they can increase the volatility of the Portfolio's net asset value,
can decrease the liquidity of the Portfolio's investments and make more
difficult the accurate pricing of the of the Portfolio's shares.

In addition, derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in derivatives could
have a large potential impact on the Portfolio's performance. If the Portfolio
invests in derivatives at inappropriate times or judges market conditions
incorrectly, such investments may lower the Portfolio's return or result in a
loss. The Portfolio also could experience losses if its derivatives were poorly
correlated with its other investments, or if the Portfolio were unable to
liquidate its position because of an illiquid secondary market. The market for
many derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.

When required by the SEC, the Portfolio will set aside permissible liquid assets
in a segregated account to cover its obligations relating to its purchase of
derivatives. To maintain this required cover, the Portfolio may have to sell
portfolio securities at disadvantageous prices or times. Derivatives may be
purchased on established exchanges ("exchange-traded" derivatives) or through
privately negotiated transactions ("over-the-counter" derivatives).
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily payment system operated by the clearing agency in order
to reduce overall credit risk. As a result, unless the clearing agency defaults,
there is relatively little counterparty credit risk associated with derivatives
purchased on an exchange. By contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly,
Wilshire will consider the creditworthiness of counterparties to
over-the-counter derivatives in the same manner as it would review the credit
quality of a security to be purchased by the Portfolio. Over-the-counter
derivatives are less liquid than exchange-traded derivatives since the other
party to the transaction may be the only investor with sufficient understanding
of the derivative to be interested in bidding for it.

Although the Portfolio will not be a commodity pool, derivatives subject the
Portfolio to the rules of the Commodity Futures Trading Commission which limit
the extent to which the Portfolio can invest in certain derivatives. The
Portfolio may invest in stock index futures contracts for hedging purposes
without limit. However, the Portfolio may not invest in such contracts for other
purposes if the sum of the amount of initial margin deposits and the premiums
paid for unexpired commodity options, other than for bona fide hedging purposes,
exceeds 5% of the liquidation value of the Portfolio's assets, after taking into
account unrealized profits and unrealized losses on such contracts it has
entered into; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.

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<PAGE>

FUTURES TRANSACTIONS. The Portfolio may enter into futures contracts on
particular securities or stock indices in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange. A futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock or stock index
at the close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of securities is made.

Engaging in these transactions involves risk of loss to the Portfolio which
could affect the value of the Portfolio's net assets adversely. Although the
Portfolio intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance exists that a liquid market will
exist for any particular contract at any particular time. Many futures exchanges
and boards of trade limit the amount of fluctuation permitted in futures
contract prices during a single trading day. Once the daily limit has been
reached in a particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and potentially subjecting the Portfolio to
substantial losses.

Successful use of futures by the Portfolio also is subject to the ability of
Wilshire to predict correctly movements in the direction of the relevant market
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the position being hedged and the
price movements of the futures contract. For example, if the Portfolio uses
futures to hedge against the possibility of a decline in the market value of
securities held in its portfolio and the prices of such securities instead
increase, the Portfolio will lose part or all of the benefit of the increased
value of securities which it has hedged because it will have offsetting losses
in its futures positions. Furthermore, if in such circumstances the Portfolio
has insufficient cash, it may have to sell securities to meet daily variation
margin requirements. The Portfolio may have to sell such securities at a time
when it may be disadvantageous to do so.

Pursuant to regulations and published positions of the SEC, the Portfolio may be
required to segregate cash or liquid assets in connection with its futures
transactions in an amount generally equal to the value of the contract. The
segregation of such assets will have the effect of limiting the Portfolio's
ability otherwise to invest those assets.

OPTIONS. The Portfolio may write covered call options, buy put options, buy call
options and write secured put options on particular securities or the Wilshire
5000 Index. Options trading is a highly specialized activity which entails
greater than ordinary investment risks. A call option for a particular security
gives the purchaser of the option the right to buy, and a writer the obligation
to sell, the underlying security at the stated exercise price at any time prior
to the expiration of the option, regardless of the market price of the security.
The premium paid to the writer is in consideration for undertaking the
obligations under the option contract. A put option for a particular security
gives the purchaser the right to sell the underlying security at the stated
exercise price at any time prior to the expiration date of the option,
regardless of the market price of the security.

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<PAGE>

Options on stock indices are similar to options on specific securities, except
that, rather than the right to take or make delivery of the specific security at
a specific price, an option on a stock index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the closing level of
that stock index is greater than, in the case of a call option, or less than, in
the case of a put option, the exercise price of the option. This amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the option expressed in dollars times a specified multiple.
The writer of the option is obligated, in return for the premium received, to
deliver this amount. Unlike options on specific securities, all settlements of
options on stock indices are in cash, and gain or loss depends on general
movements in the stocks included in the index rather than price movements in
particular stock.

OTHER DERIVATIVES. The Portfolio may take advantage of opportunities in the area
of futures contracts and any other derivatives which presently are not
contemplated for use by the Portfolio or which currently are not available but
which may be developed, to the extent such opportunities are both consistent
with the Portfolio's investment objective and legally permissible for the
Portfolio. Before entering into such transactions or making any such investment,
the Portfolio will provide appropriate disclosure in its prospectus or SAI.

FOREIGN SECURITIES. The Portfolio may include securities of the foreign issuers
included in the Wilshire 5000 Index. Investments in foreign securities have
additional risks, including future political and economic developments, possible
imposition of withholding taxes on income payable on the securities, the
possible establishment of currency exchange controls, adoption of other foreign
governmental restrictions and possible seizure or nationalization of foreign
assets.

PREFERRED STOCK. The Portfolio may invest up to 5% of its assets in preferred
stock. Preferred Stock, unlike common stock, offers a stated dividend rate
payable from a corporation's earnings. Such preferred stock dividends may be
cumulative or non-cumulative, participating or auction rate. If interest rates
rise, the fixed dividend on preferred stocks may be less attractive, causing the
price of preferred stocks to decline. Preferred stock may have mandatory sinking
fund provisions, as well as call/redemption provisions prior to maturity, a
negative feature when interest rates decline. Dividends on some preferred stock
may be "cumulative," requiring all or a portion of prior unpaid dividends to be
paid before dividends are paid on the issuer's common stock. Preferred stock
also generally has a preference over common stock on the distribution of a
corporation's assets in the event of liquidation of the corporation, and may be
"participating," which means that it may be entitled to a dividend exceeding the
stated dividend in certain cases. The rights of preferred stocks on the
distribution of a corporation's assets in the event of a liquidation are
generally subordinate to the rights associated with a corporation's debt
securities.

7
<PAGE>

underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield
basis, and thus may not depreciate to the same extent as the underlying
common stock. Convertible securities rank senior to common stocks in a
issuer's capital structure and are consequently of higher quality and entail
less risk than the issuer's common stock, although the extent to which such
risk is reduced depends in large measure upon the degree to which the
convertible security sells above its value as a fixed income security.

WARRANTS AND RIGHTS. The Portfolio may invest up to 5% of its assets in warrants
and rights. Warrants are options to purchase equity securities at a specified
price valid for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities. Rights are similar to
warrants, but generally are shorter in duration and are distributed by the
issuer directly to its shareholders. Warrants and rights have no voting rights,
receive no dividends and have no rights to the assets of the issuer.

INVESTMENT RESTRICTIONS

The investment restrictions described below are fundamental policies of the
Portfolio and cannot be changed without the approval of a majority of the
Portfolio's outstanding voting shares (as defined by the 1940 Act). All
percentage limitations apply only at the time of the transaction. Subsequent
changes in value or in the Portfolio's total assets will not result in a
violation of the percentage limitations. The Portfolio may not:

1. Invest in commodities, except that the Portfolio may purchase and sell
options, forward contracts, and futures contracts, including those relating to
indices, and options on futures contracts or indices.

2. Purchase, hold or deal in real estate or oil, gas or other mineral leases or
exploration or development programs, but the Portfolio may purchase and sell
securities that are secured by real estate or issued by companies that invest or
deal in real estate.

3. Borrow money, except for temporary or emergency (not leveraging) purposes in
an amount up to 33 1/3% of the value of the Portfolio's total assets (including
the amount borrowed) based on the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made. When
borrowings exceed 5% of the value of the Portfolio's total assets, the Portfolio
will not make any additional investments. For purposes of this investment
restriction, the entry into options, forward contracts, or futures contracts,
including those relating to indices and options on futures contracts or indices,
will not constitute borrowing.

4. Make loans to others, except through the purchase of debt obligations and
entry into repurchase agreements. However, the Portfolio may lend its portfolio
securities in an amount not to exceed 33 1/3% of the value of its total assets.
Any loans of portfolio securities will be made according to guidelines
established by the SEC and the Company's Board of Directors.

5. Act as an underwriter of securities of other issuers, except to the extent
the Portfolio may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.

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<PAGE>

6. Invest more than 25% of its assets in the securities of issuers in any single
industry, provided there will be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.

7. Invest more than 5% of its assets in the obligations of any single issuer,
except that up to 25% of the value of the Portfolio's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.

8. With respect to 75% of the Portfolio's assets, hold more than 10% of the
outstanding voting securities of any single issuer.

9. Issue any senior security (as defined in Section 18(f) of the 1940 Act),
except to the extent that the activities permitted in investment restrictions
No. 1 and 3 may be deemed to give rise to a senior security.

The following investment restrictions are non-fundamental and may be changed by
a vote of a majority of the Company's Board of Directors. The Portfolio may not:

1. Invest in the securities of a company for the purpose of exercising
management or control, but the Portfolio will vote the securities it owns in its
portfolio as a shareholder in accordance with its views.

2. Enter into repurchase agreements providing for settlement in more than seven
days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Portfolio's net assets would be so
invested.

3. Purchase securities of other investment companies, except to the extent
permitted under the 1940 Act or those received as part of a merger or
consolidation.

DIRECTORS AND OFFICERS

Under Maryland law, the business and affairs of the Portfolio and the Company
are managed under the direction of the Board of Directors. Information
pertaining to the Directors and officers is set forth below.

DIRECTORS
* Indicates that the Director is an "interested person" of the Company as
defined in the 1940 Act.

NAME: *Thomas D. Stevens
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue,
Suite 700, Santa Monica, California 90401
POSITION: Chairman of the Board, President and Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing Director and Principal
of Wilshire for more than the past five years. He is the Chief Investment
Officer of the Wilshire Asset Management division of Wilshire. Wilshire Asset
Management is a provider of index and structured equity and fixed income
applications.

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<PAGE>

NAME: Dewitt F. Bowman
AGE: 70
ADDRESS: 79 Eucalyptus Knoll, Mill Valley, California 94941
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since January 1994, Pension Investment
Consultant providing advice on large pension fund investment strategy, new
product evaluation and integration, and large plan investment analysis and
management. Currently a director of the RREEF America REIT, Dresdner RCM Capital
Fund, Inc. and Dresdner RCM Equity Funds, Inc., and trustee of the Pacific Gas &
Electric Nuclear Decommissioning Trust, Brandes Investment Trust and PCG Private
Equity Fund.

NAME: *Robert J. Raab, Jr.
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue,
Suite 700, Santa Monica, California 90401
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing director and Principal
of Wilshire for more than the past five years. He is head of Wilshire's
Institutional Services Division and is responsible for Wilshire Equity, Fixed
Income, Index Fund and Portfolio Accounting products.

NAME: Anne Wexler
AGE: 69
ADDRESS: c/o The Wexler Group, 1317 F Street, N.W., Suite 600,
Washington, D.C. 20004
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Chairman of the Wexler Group,
consultants specializing in government relations and public affairs, for more
than fifteen years. She is also a director of Alumax, The Dreyfus
Corporation, Comcast Corporation, The New England Electric System, Nova
Corporation, and sixteen mutual funds in the Dreyfus mutual fund family. In
addition, she is a member of the Board of the Carter Center of Emory
University, the Council of Foreign Relations, the National Park Foundation,
the Visiting Committee of the John F. Kennedy School of Government at Harvard
University and the Board of Visitors of the University of Maryland School of
Public Affairs.

NAME: Cynthia A. Hargadon
AGE: 45
ADDRESS: c/o Potomac Investment Services, L.P., 3 Bethesda Metro
Center, Suite 530, Bethesda, Maryland 20814
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since June 2000, Managing Director of
Potomac Asset Management Company, Inc. Prior to June 2000, Director of
Investments for the National Automobile Dealers Association. From November 1996
to July 1998, President of Stable Value Investment Association, Inc., educating
the public about stable value as a fixed income alternative and how to use it in
the asset allocation process for defined contribution plan participants. She is
also a project consultant of Johnson Custom Strategies, Inc. an independent
investment services firm providing specialized asset management strategies to
institutional clients. From May 1987 to November 1996, Senior Vice-President and
Chief Investment Officer of ICMA Retirement Corporation, a retirement plan
administrator.

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<PAGE>

For so long as the plan described in "Service and Distribution Plan" remains in
effect, the Directors of the Company who are not "interested persons" of the
Company, as defined in the 1940 Act, will be selected and nominated by the
Directors who are not "interested persons" of the Company.

The Company pays its Directors who are not "interested persons" of the Company
an annual retainer of $3,000 and a fee of $2,500 per meeting. The aggregate
amount of compensation paid to each current Director by the Company for the
fiscal year ended August 31, 2000, is shown below:

AGGREGATE
NAME OF COMPENSATION
DIRECTOR PAID BY WILSHIRE
-------- ----------------
DeWitt F. Bowman $13,000
Cynthia A. Hargadon $13,000
Robert J. Raab, Jr $0
Thomas D. Stevens $0
Anne L. Wexler $13,000

OFFICERS

NAME: David R. Borger
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue,
Suite 700, Santa Monica, California 90401
POSITION: Vice President and Treasurer
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of the
Company and Director of Research for its Wilshire Asset Management division for
more than six years.

NAME: Alan L. Manning
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue,
Suite 700, Santa Monica, California 90401
POSITION: Secretary
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1990, Vice President, Secretary
and General Counsel of the Company.

NAME: Michael J. Napoli, Jr.
AGE: 49
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue,
Suite 700, Santa Monica, California 90401
POSITION: Vice President
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of the
Company for more than six years. Director of Marketing for Wilshire Asset
Management division.

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<PAGE>

NAME: Gail A. Hanson
AGE: 58
ADDRESS: c/o PFPC Inc., 101 Federal Street, Boston, Massachusetts 02110
POSITION: Vice President and Assistant Secretary of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President, PFPC Inc. ("PFPC")
(formerly First Data Investor Services Group, Inc. ("FDISG") since
September 1994.

NAME: Robert C. Herforth
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Senior Financial
Administrator of PFPC's (formerly FDISG) Financial Reporting Department.
From 1995 to 1997, Financial Administrator of FPS. Prior to 1995, he
was a Supervisor in the Transfer Agent Control Department of FPS.

NAME: George Graner
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1999 Senior Section Manager
of PFPC's (formerly FDISG) Financial Reporting Department. From 1992 to 1999,
Mr. Graner served in various capacities with FPS and PFPC.

NAME: Brian O'Neill
AGE: 32
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Manager of PFPC's
(formerly FDISG) Financial Reporting Department. From 1992 to 1997,
Mr. O'Neill served in various capacities with FPS.

As of November 30, 2000, the Directors and officers of the Company as a group
owned less than 1% of the outstanding shares of each class of the Portfolio.
Wilshire is controlled by its President, Dennis Tito, who owns a majority of
its outstanding voting stock.

PRINCIPAL HOLDERS OF SECURITIES

Listed below are the names and addresses of those shareholders who owned of
record or beneficially 5% or more of each class of shares of the Portfolio as of
November 30, 2000. Shareholders who have the power to vote a large percentage of
shares of the Portfolio may be in a position to control the portfolio and
determine the outcome of a shareholder meeting. A shareholder who owns, directly
or indirectly, 25% or more of the Portfolio's voting securities may be deemed a
"control person", as defined by the 1940 Act.

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<PAGE>

Shareholder Percentage Owned
----------- -----------------

Provident Mutual 100%
Life Insurance Company
P.o.Box 1717
Volley Forge

INVESTMENT ADVISORY AND OTHER SERVICES

EXPENSES. From time to time, Wilshire or PFPC may waive receipt of its fees
and/or voluntarily assume certain expenses of the Portfolio or the Company,
which would have the effect of lowering the overall expense ratio of the
Portfolio and increasing the return to investors at the time such amounts are
waived or assumed, as the case may be. The Company will not pay Wilshire or PFPC
for any amounts which may be waived or assumed. Each of PFPC Distributors Inc.
("PFPC Distributors"), Wilshire or PFPC may bear other expenses of distribution
of the shares of the Portfolio or of the provision of shareholder services to
the Portfolio's shareholders, including payments to securities dealers or other
financial intermediaries or service providers, out of its profits and available
resources other than the advisory and administration fees paid by the Company.

All expenses incurred in the operation of the Company are borne by the Company,
except to the extent specifically assumed by PFPC Distributors, Wilshire or
PFPC. The expenses borne by the Company include: organizational costs; taxes;
interest; brokerage fees and commissions, if any; fees of Directors who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of PFPC Distributors, Wilshire or PFPC or any of their
affiliates; SEC fees; state Blue Sky qualification fees; advisory and
administration fees; charges of custodians; transfer and dividend disbursing
agents' fees; certain insurance premiums; industry association fees; outside
auditing and legal expenses; costs of maintaining the Company's existence; costs
of independent pricing services; costs attributable to investor services
(including, without limitation, telephone and personnel expenses); costs of
shareholders' reports and meetings; costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders; and any extraordinary expenses. Expenses
attributable to a particular series or class of shares are charged against the
assets of that series or class. Other expenses of the Company are allocated
among all series on the basis determined by the Board of Directors, including,
but not limited to, proportionately in relation to the net assets of the series.

INVESTMENT ADVISORY AGREEMENT AND FEES. Wilshire provides investment
advisory services to the Portfolio pursuant to an Investment Advisory Agreement
dated July 11, 1996, as amended on June 8, 1998. All advisory fees are accrued
daily. For the fiscal years ended August 31, 2000, the advisory fees for the
Portfolio payable to Wilshire, the reductions attributable to voluntary fee
waivers, and the net fees paid with respect to the Portfolio, were as follows:

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<PAGE>

ADVISORY REDUCTION NET
FEE PAYABLE IN FEE FEE PAID

$107,392 $107,392 $-0-

The Advisory Agreement provides that Wilshire shall exercise its best judgment
in rendering the services to be provided to the Portfolio under the Agreement.
Wilshire is not liable under the Advisory Agreement for any error of judgment or
mistake of law or for any loss suffered by the Portfolio. Wilshire is not
protected, however, against any liability to the Portfolio or its shareholders
to which Wilshire would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties under the
Advisory Agreement or by reason of Wilshire's reckless disregard of its
obligations and duties under the Advisory Agreement.

The Advisory Agreement is terminable with respect to the Portfolio without
penalty on 60 days' notice by the Company's Board of Directors, by vote of a
majority of the Portfolio's outstanding shares (as defined in the 1940 Act), or
on at least 90 days' notice by Wilshire.

The Advisory Agreement terminates in the event of its assignment (as defined in
the 1940 Act).

SERVICES AGREEMENT. Wilshire has entered into a Services Agreement, dated May
31, 1999, as amended September 27, 1999, with PFPC (formerly, First Data
Investor Services Group, Inc.), 4400 Computer Drive, Westboro, MA 01581. PFPC
furnishes Wilshire with clerical help, accounting, data processing, internal
auditing, legal services and certain other services as may be required by
Wilshire. PFPC also prepares tax returns, reports to the Portfolio's
shareholders, reports and filings with the SEC and state securities authorities
provides sales literature review and recommendations for compliance with the
National Association of Securities Dealers, Inc. ("NASD") and SEC rules and
regulations, prepares training materials for use by personnel of the Company or
the Adviser, prepares ongoing compliance updates, coordinates the registration
of the Company with the National Securities Clearing Corp. ("NSCC") and filing
required Company reports with NSCC, provision of advice and counsel to the
Company with respect to regulatory matters, including monitoring regulatory and
legislative developments that may affect the Company and assist in the
preparation of quarterly board materials with regard to sales and other
distribution related data reasonably requested by the board of directors and
generally assists in all aspect of the Company's operations, other than
providing investment advice.

The Services Agreement has an initial three year term and, upon the expiration
date of the initial term, the Services Agreement will automatically renew for
successive terms of three years each, unless the Company or PFPC provides
written notice to the other of its intent not to renew. Such notice must be
received not less than 90 days and not more than 180 days prior to the
expiration of the initial term or the then current renewal term.

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<PAGE>

As compensation for PFPC's services under the Services Agreement, PFPC is
entitled to receive from the Company a monthly administration fee at the annual
rate of 0.15% of the Company's monthly average net assets up to aggregate assets
of $1 billion, 0.10% of such value on the next $4 billion, and 0.08% on the
excess net assets. In addition, Wilshire has agreed to pay PFPC an annual fee of
$25,000 for each Portfolio and $2,000 for each additional class.

With respect to the Portfolio, PFPC has agreed to waive certain
administration and accounting asset fees, transfer agent and fund accounting
flat fees. For the year ended August 31, 2000, PFPC voluntarily waived fees as
follows:

Administration and Accounting...................$185,999
Transfer Agency.................................$ 42,000

For the fiscal year ended August 31, 2000, the administration fees paid to
PFPC for the Portfolio was $0.

SERVICE AND DISTRIBUTION PLAN. The Service and Distribution Plan (the "Plan") of
the Company adopted pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder was approved as to the Qualified Class shares of the Portfolio by
vote of the majority of both (a) the Directors of the Company and (b) those
Directors who are not interested persons of the Company (as defined in the 1940
Act) and have no direct or indirect financial interest in the operation of the
Plan or any agreement related to it (the "Independent Directors"), in each case
cast in person at a meeting called for the purpose of voting on the Plan.

The Plan will continue in effect with respect to the Qualified Class shares of
the Portfolio only so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors, cast in person at a meeting called for the purpose of
voting on the Plan. The Plan may not be amended in any material respect with
respect to the Qualified Class shares of the Portfolio unless such amendment is
approved by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors of the Company, cast in person at a meeting called for the
purpose of voting on the, and may not be amended to increase materially the
amount to be spent thereunder without such approvals and approval by vote of at
least a majority (as defined in the 1940 Act) of the outstanding shares of the
Qualified Class of the Portfolio. The Plan may be terminated at any time with
respect to the Qualified Class shares of the Portfolio by vote of a majority of
the Independent Directors or by vote of a majority (as defined in the 1940 Act)
of the outstanding shares of the Qualified Class of the Portfolio.

TRANSFER AND DIVIDEND DISBURSING AGENT. PFPC, P.O. Box 5170, Westboro,
Massachusetts 01581, serves as the Company's transfer agent and dividend
disbursing agent.

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<PAGE>

CUSTODIAN. The Northern Trust Company, located at 50 South LaSalle Street,
Chicago, Illinois 60675, serves as the Portfolio's custodian.

COUNSEL. Paul Hastings, Janofsky & Walker LLP, 535 South Flower Street, Los
Angeles, California 90071-2371, serves as counsel for the Company.

INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, Two Commerce way,
2001 Market Street, Philadelphia, Pennsylvania 19103, serves as auditor for
the Company.

CODE OF ETHICS

The Board of Directors of the Company has adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act. The Code of Ethics restricts the investing
activities of Company officers, Directors and advisory persons and, as described
below, imposes additional, more onerous restrictions on Portfolio investment
personnel.

Each person covered by the Code of Ethics is prohibited from purchasing or
selling any security which, to such person's knowledge, is being purchased or
sold (as the case maybe), or is being considered for purchase or sale, by the
Portfolio. Investment personnel are subject to additional restrictions such as a
ban on acquiring securities in an initial public offering, "blackout periods"
which prohibit trading by investment personnel of the Portfolio within periods
of trading by the Portfolio in the same security and a ban on short-term trading
in securities. Investment personnel are required to preclear any personal
securities investment (with limited exceptions, such as government securities)
and must comply with ongoing requirements concerning recordkeeping and
disclosure of personal securities investments. The preclearance requirement and
associated procedures are designed to identify any prohibition or limitation
applicable to a proposed investment.

PORTFOLIO TRANSACTIONS

Wilshire supervises the placement of orders on behalf of the Portfolio for the
purchase or sale of portfolio securities. Portfolio transactions are allocated
among broker-dealers in the best judgment of Wilshire and in a manner deemed
fair and reasonable to shareholders. The primary consideration is prompt
execution of orders at the most favorable net price. Subject to this
consideration, the brokers selected may include those that supplement Wilshire's
research facilities with statistical data, investment information, economic
facts and opinions. Information so received is in addition to and not in lieu of
services required to be performed by Wilshire and its fees are not reduced by
the receipt of such supplemental information. Such information may be useful to
Wilshire in serving both the Portfolio and other clients which it advises and,
conversely, supplemental information obtained by the placement of business of
other clients may be useful to Wilshire in carrying out its obligations to the
Portfolio. Brokers also are selected because of their ability to handle special
executions such as are involved in large block trades or broad distributions,
provided the primary consideration is met. When transactions are executed in the
over-the-counter market, the Portfolio will deal with the primary market makers
unless a more favorable price or execution otherwise is obtainable.

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<PAGE>

Although Wilshire makes investment decisions for the Portfolio independently
from those of its other accounts, investments of the kind made by the Portfolio
may often also be made by such other accounts. When Wilshire buys or sells the
same security at substantially the same time on behalf of the Portfolio and one
or more other accounts managed by Wilshire, it allocates available investments
by such means as, in its judgment, result in fair treatment. Wilshire aggregates
orders for purchases and sales of securities of the same issuer on the same day
among the Portfolio and their other managed accounts, and the price paid to or
received by the Portfolio and those accounts is the average obtained in those
orders. In some cases, such aggregation and allocation procedures may affect
adversely the price paid or received by the Portfolio or the size of the
position purchased or sold by the Portfolio.

Portfolio turnover may vary from year to year, as well as within a year. Under
normal market conditions, the Portfolio's turnover rate generally will not
exceed 80%. High turnover rates, generally as a result of fluctuating market
conditions, are likely to result in comparatively greater brokerage expenses.
Recognizing this, Wilshire attempts to minimize the cost per share of trading
while at the same time implementing only those trades necessary to maintain the
proper style exposure.

For the fiscal year ended August 31, 2000, the Portfolio paid total
brokerage commissions of $81, 317.00.

As of August 31, 2000, the Portfolio held the following securities of its
regular brokers or dealers:

Brokers or Dealers Market Value
------------------ ------------
Morgan Stanley Dean Witter & Co. $774,450
J.P. Morgan & Co. $167,187
Investment Technology Group, Inc. $ 12,432

No brokerage commissions were paid to the Company's distributor. There were no
spreads or concessions on principal transactions for any such period.

NET ASSET VALUE

The net asset value per share of the Qualified Class of the Portfolio is
calculated as of the close of regular trading of the NYSE on each day the NYSE
is open for trading.

The Portfolio's investment securities are valued at the last sale price on the
securities exchange or national securities market on which such securities
primarily are traded. Securities not listed on an exchange or national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is used
when no asked price is available. Short-term investments are valued at amortized
cost. Any securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors. Expenses and fees, including the
advisory and administration fees, are accrued daily and taken into account for
the purpose of determining the net asset value of the Portfolio's shares.

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<PAGE>

PURCHASE AND REDEMPTION OF SHARES

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Purchase and Redemption of Shares."

THE DISTRIBUTOR. PFPC Distributors Inc. ("PFPC Distributors"), Four Falls
Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428-2961, serves
as the Company's distributor pursuant to an agreement which is renewable
annually by the Board of Directors. The Qualified Class shares of the Portfolio
are continuously offered to Insurers at the net asset value per share next
determined after a proper purchase request has been received and accepted by the
Company. The Distribution Agreement between the Distributor and the Company
provides that the Company shall indemnify the Distributor against any liability
arising out of any untrue statement of a material fact or any omission of a
material fact in the Company's registration statement necessary to make the
statements therein misleading, unless such liability results from the
Distributor's willful misfeasance, bad faith or negligence in the performance of
its duties under the Agreement.

IN-KIND PURCHASES. Payments for the Portfolio's shares may, at the discretion of
the Company, be made in the form of securities which are permissible investments
for the Portfolio. For further information about this form of payment, please
contact the Transfer Agent. Generally, securities which are accepted by the
Portfolio as payment for the Portfolio's shares will be valued using the
Portfolio's procedures for valuing its own shares at the time the Portfolio's
net asset value is next determined after receipt of a properly completed order.
All dividends, interest, subscription or other rights pertaining to such
securities will become the property of the Portfolio and must be delivered to
the Portfolio upon receipt from the issuer. The Portfolio will require that (1)
it will have good and marketable title to the securities received by it; (2) the
securities are in proper form for transfer to the Portfolio and are not subject
to any restriction on sale by the Portfolio under the Securities Act of 1933, as
amended, or otherwise; and (3) the Portfolio receives such other documentation
as the Company may, in its discretion, deem necessary or appropriate. Investors
who are subject to Federal taxation may realize a gain or loss for Federal
income tax purpose upon such a payment.

REDEMPTION COMMITMENT. The Board of Directors reserves the right to make
payments in whole or in part in securities or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Portfolio to the detriment of the existing shareholders. In such event, the
securities would be readily marketable, to the extent available, and would be
valued in the same manner as the Portfolio's investment securities are valued.
If the recipient sold such securities, brokerage charges would be incurred.

SUSPENSION OF REDEMPTIONS. The Company may suspend the right of redemption with
respect to the Portfolio or postpone the date of payment (a) during any period
when the New York Stock Exchange is closed (other than customary weekend and
holiday closings), (b) when trading in the markets the Portfolio ordinarily
utilizes is restricted, or when an emergency exists as determined by the SEC so
that disposal of the investments or determination of its net asset value is not
reasonably practicable, or (c) for such other periods as the SEC by order may
permit to protect the shareholders.

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<PAGE>

NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which the
New York Stock Exchange is closed currently are: New Year's Day, Presidents'
Day, Rev. Martin Luther King, Jr. Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.

DIVIDENDS, DISTRIBUTION AND TAXES

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Dividends, Distributions and Taxes." For a
discussion of the impact on Contract Owners of income taxes an Insurer may owe
as a result of its ownership of shares of the Portfolio, its receipt of
dividends and distributions thereon, and its gains from the purchase and sale
thereof, reference should be made to your employer's Contract disclosure
statement.

REGULATED INVESTMENT COMPANIES

The Company's management believes that the Portfolio qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code") for the fiscal year ended August 31, 2000. Qualification as a regulated
investment company relieves the Portfolio from any liability for Federal income
taxes to the extent that its earnings are distributed in accordance with the
applicable provisions of the Code. The term "regulated investment company" does
not imply the supervision of management or investment practices or policies by
any government agency.

As a regulated investment company, the Portfolio will not be liable for federal
income tax on its income and gains provided it distributes all of its income and
gains currently. Qualification as a regulated investment company under the Code
requires, among other things, that the Portfolio (a) derive at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies, or other income (including, but not limited to, gains from options,
futures or forward contracts) derived with respect to its business of investing
in such securities or currencies; (b) diversify its holdings so that, at the end
of each fiscal quarter, (i) at least 50% of the market value of the Portfolio's
assets is represented by cash, U.S. Government securities and securities of
other regulated investment companies, and other securities (for purposes of this
calculation generally limited, in respect of any one issuer, to an amount not
greater than 5% of the market value of the Portfolio's assets and 10% of the
outstanding voting securities of such issuer) and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
U.S. Government securities or the securities of other regulated investment
companies), or two or more issuers which the Company controls and which are
determined to be engaged in the same or similar trades or businesses; and (c)
distribute at least 90% of its investment company taxable income (which includes
dividends, interest, and net short-term capital gains in excess of net long-term
capital losses) each taxable year.

Because the Portfolio is established in part as an investment for certain
variable annuity contracts, the Code imposes additional diversification
requirements on the Portfolio. Generally, these requirements are that at each
quarter end and for 30 days thereafter no more than 55% of the Portfolio's total
assets may be in any one investment, no more than 70% in any two investments, no
more than 80% in any three investments, and no more than 90% in any four
investments.

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<PAGE>

The Portfolio generally will be subject to a nondeductible excise tax of 4% to
the extent that it does not meet certain minimum distribution requirements as of
the end of each calendar year. To avoid the tax, the Portfolio must distribute
during each calendar year an amount equal to the sum of (1) at least 98% of its
ordinary income and net capital gain (not taking into account any capital gains
or losses as an exception) for the calendar year, (2) at least 98% of its
capital gains in excess of its capital losses (and adjusted for certain ordinary
losses) for the twelve month period ending on October 31 of the calendar year,
and (3) all ordinary income and capital gains for previous years that were no
distributed during such years. A distribution will be treated as paid on
December 31 of the calendar year if it is declared by the Portfolio in October,
November, or December of that year to shareholders of record on a date in such a
month and paid by the Portfolio during January of the following year. To avoid
the excise tax, the Portfolio intends to make timely distributions of their
income in compliance with these requirements and anticipate that it will not be
subject to the excise tax.

Any dividend or distribution paid shortly after an Insurer's purchase may have
the effect of reducing the aggregate net asset value of shares below the cost of
investment. Such a dividend or distribution would be a return on investment in
an economic sense.

HEDGING TRANSACTIONS

If an insurer holds shares of the Portfolio while holding a short position in a
regulated futures contract or an option in such regulated futures contract that
substantially diminishes the Insurer's risk of loss in its Portfolio shares (an
"offsetting position"), Internal Revenue Service regulations clarify that (i)
any losses on the disposition of Portfolio shares will be required to be
deferred to the extent of any unrealized appreciation in the short position and
(ii) such holding will limit the Insurer's ability to claim the corporate
dividends received deduction in respect of Portfolio dividends.

Ordinarily, gains and losses realized from portfolio transactions will be
treated as a capital gain or loss. All or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income under
Section 1258. "Conversion transactions" are defined to include certain futures,
option and "straddle" transactions, transactions marketed or sold to produce
capital gains, or transactions described in Treasury regulations to be issued in
the future.

Under Section 1256 of the Code, a gain or loss realized by the Portfolio from
certain financial futures transactions will be treated as 60% long-term capital
gain or loss and 40% short-term capital gain or loss. Gain or loss will arise
upon the exercise or lapse of such futures as well as from closing transactions.
In addition, any such futures remaining unexercised at the end of the
Portfolio's taxable year will be treated as sold for their then fair market
value, resulting in additional gain or loss to the Portfolio characterized in
the manner described above.

Offsetting positions held by the Portfolio involving financial futures may
constitute "straddles." Straddles are defined to include "offsetting positions"
in actively traded personal property. The tax treatment of straddles is governed
by Sections 1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256. As such, all or a portion
of any short- or long-term capital gain from certain "straddle" and/or
conversion transactions may be recharacterized as ordinary income.

20
<PAGE>

If the Portfolio were treated as entering into straddles by reason of its
futures transactions, such straddles could be characterized as "mixed straddles"
if the futures transactions comprising such straddles were governed by Section
1256 of the Code. The Portfolio may make one or more elections with respect to
"mixed straddles." Depending upon which election is made, if any, the results to
the Portfolio may differ. If no election is made, to the extent the straddle
rules apply to positions established by the Portfolio, losses realized by the
Portfolio will be deferred to the extent of unrealized gain in any offsetting
positions. Moreover, as a result of the straddle rules, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gain on straddle positions may be recharacterized as
short-term capital gain, and as a result of the conversion transaction rules,
long-term capital gain may be recharacterized as ordinary income.

Under Section 1259 of the Code, enacted as part of the Taxpayer Relief Act of
1997, the Portfolio will recognize gain if it enters into a futures contract
relating to an appreciated direct position in any stock or debt instrument, or
if it acquires stock or a debt instrument at a time when the Portfolio has an
offsetting appreciated position in the stock or debt instrument. Such
transactions are considered to be constructive sales for income tax purposes.

PERFORMANCE INFORMATION

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Performance Information."

For purposes of advertising, performance may be calculated on the basis of
average annual total returns and/or total returns of the Portfolio. "Total
return" is the change in value of an investment in the Portfolio for a specified
period. The "average annual total return" of the Portfolio is the average annual
compound rate of return in an investment in the Portfolio assuming the
investment has been held for one-, five- and ten year periods (or the life of
the Portfolio if shorter).

Performance will vary from time to time and past results are not necessarily
representative of future results. You should remember that performance is a
function of portfolio management and is also affected by operating expenses,
market conditions and the risks associated with the Portfolio's objective and
investment policies. Performance information, such as that described above, may
not provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.

Comparative performance information may be used from time to time in advertising
or marketing the shares of the Portfolio, including data from the Wilshire 5000
Index, Lipper Analytical Services, Inc., the Standard & Poor's 500 Composite
Stock Price Index, the Dow Jones Industrial Average, Morningstar, Inc. and other
industry publications.

Average annual total return is calculated by determining the ending redeemable
value of an investment purchased at net asset value per share with a
hypothetical $1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of the
initial investment, taking the "nth" root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.

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<PAGE>

Total return is calculated by subtracting the amount of the net asset value per
share at the beginning of a stated period from the net asset value per share at
the end of the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset value
per share at the beginning of the period.

Quotations of Portfolio total returns and yields will not reflect Contract
charges and expenses. The Contract disclosure document will contain information
about performance of the relevant separate account and Contract.

The Portfolio's total return (not annualized) for the fiscal year ended
August 31, 2000 were as follows:

Since Inception*

Wilshire 5000 Index Portfolio 11.79%

-------------------------
* Qualified Class shares commenced operations on May 10, 2000

OTHER INFORMATION

The Company is a Maryland corporation organized on July 30, 1992. It currently
has five Portfolios - Large Company Growth Portfolio, Large Company Value
Portfolio, Small Company Growth Portfolio, Small Company Value Portfolio and
Wilshire 5000 Index Portfolio -- each of which has several classes of shares.

Each share of a Portfolio has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares of each class of a Portfolio have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights and
are freely transferable.

Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
under the provisions of the 1940 Act or applicable state law or otherwise to the
holders of the outstanding voting securities of an investment company, such as
the Company, will not be deemed to have been effectively acted upon unless
approved by the holders of the outstanding shares of each series affected by
such matter. Rule 18f-2 further provides that a series shall be deemed to be
affected by a matter unless it is clear that the interests of all series in the
matter are identical or that the matter does not affect any interest of such
series. However, the Rule exempts the selection of independent accountants and
the election of Directors from the separate voting requirements of the Rule.
Rule 18f-3 under the 1940 Act makes further provision for the voting rights of
each class of shares of an investment company which issues more than one class
of voting shares. In particular, Rule 18f-3 provides that each class shall have
exclusive voting rights on any matter submitted to shareholders that relates
solely to the class' arrangement for services and expenses, and shall have
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class.

Shareholders and Contract Owners will receive annual and semi-annual reports
that include the Portfolio's financial statements.

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<PAGE>

FINANCIAL STATEMENTS

The Company's audited financial statements for the Portfolio contained in its
annual report for the fiscal year ended August 31, 2000 is incorporated into
this Statement of Additional Information by reference in their entirety. Such
financial statements for the fiscal year ended August 31, 2000 has been audited
by the Company's independent auditors, PricewaterhouseCoopers LLP, whose report
thereon appears in such Annual Report. Such financial statements have been
incorporated herein in reliance upon such report given upon their authority as
experts in accounting and auditing.

<PAGE>

WILSHIRE TARGET FUNDS, INC.

WILSHIRE 5000 INDEX PORTFOLIO

HORACE MANN CLASS OF SHARES

STATEMENT OF ADDITIONAL INFORMATION
(http://www.wilfunds.com)

DECEMBER 20, 2000

This Statement of Additional Information ("SAI") provides supplementary
information for the Horace Mann Class of Shares of the Wilshire 5000 Index
Portfolio series (the "Portfolio") of Wilshire Target Funds, Inc. (the
"Company").

This Statement of Additional Information is not a prospectus, and it should
be read in conjunction with the prospectus for the Portfolio dated December
20, 2000. You can obtain the Portfolio's prospectus by contacting us at:
Wilshire Target Funds, Inc., P.O. Box 60488, King of Prussia, Pennsylvania
19406-0488, 877-720-3701.

TABLE OF CONTENTS

The Portfolio................................................................2
Investment Policies and Risks................................................2
Investment Restrictions......................................................8
Directors and Officers.......................................................9
Principal Holders of Securities..............................................13
Investment Advisory and Other Services.......................................13
Code of Ethics...............................................................16
Portfolio Transactions.......................................................16
Net Asset Value..............................................................17
Purchase and Redemption of Shares............................................18
Dividends, Distribution and Taxes............................................19
Performance Information......................................................23
Other Information............................................................24
Financial Statements.........................................................24

<PAGE>

THE PORTFOLIO

The Company is a diversified, open-end investment management company that
currently offers shares of a number of series and classes, including Horace
Mann Class of Shares of the Wilshire 5000 Index Portfolio. The Company also
offers other classes of shares of the Wilshire 5000 Index Portfolio in
separate prospectuses.

Horace Mann Class of Shares are available through agents and other sales
representatives of Horace Mann Investors, Inc. ("Horace Mann"). Horace Mann
is a registered broker/dealer with the National Association of Securities
Dealers and a wholly-owned subsidiary of the Horace Mann Educators
Corporation.

INVESTMENT POLICIES AND RISKS

The Portfolio may invest in the investments described below:

MONEY MARKET INSTRUMENTS. The Portfolio may invest in money market
instruments, including certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by domestic banks,
foreign subsidiaries or branches of domestic banks, domestic and foreign
branches of foreign banks, domestic savings and loan associations and other
banking institutions.

A certificate of deposit is a negotiable certificate requiring a bank to
repay funds deposited with it for a specified period of time.

A time deposit is a non-negotiable deposit maintained in a banking
institution for a specified period of time at a stated interest rate. The
Portfolio will only invest in time deposits of domestic banks that have total
assets in excess of one billion dollars. Time deposits held by the Portfolio
will not benefit from insurance administered by the Federal Deposit Insurance
Corporation.

A bankers' acceptance is a credit instrument requiring a bank to pay a draft
drawn on it by a customer. These instruments reflect the obligation both of
the bank and of the drawer to pay the face amount of the instrument upon
maturity. Other short-term bank obligations in which the Portfolio may invest
may include uninsured, direct obligations bearing fixed, floating or variable
interest rates.

<PAGE>

With respect to such securities issued by foreign branches and subsidiaries
of domestic banks, and domestic and foreign branches of foreign banks, the
Portfolio may be subject to additional investment risks that are different in
some respects from those incurred by the Portfolio which invests only in debt
obligations of U.S. domestic issuers. Such risks include possible future
political and economic developments, possible seizure or nationalization of
foreign deposits, the possible imposition of foreign withholding taxes on
interest income, the possible establishment of exchange controls or the
adoption of other foreign governmental restrictions which may adversely
affect the payment of principal and interest on these securities.

REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thus determines
the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
A repurchase agreement involves risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or
restrictions upon the Portfolio's ability to dispose of the underlying
securities. The Company's custodian or sub-custodian will hold in a
segregated account the securities acquired by the Portfolio under a
repurchase agreement. Repurchase agreements are considered, under the
Investment Company Act of 1940, as amended (the "1940 Act"), to be loans by
the Portfolio. To try to reduce the risk of loss on a repurchase agreement,
the Portfolios will enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars, only with respect to
securities of the type in which the Portfolio may invest, and will require
that additional securities be deposited with the custodian or sub-custodian
if the value of the securities purchased decreases below the repurchase price.

LENDING PORTFOLIO SECURITIES. The Portfolio may seek additional income by
lending its securities on a short-term basis to banks, brokers and dealers
under agreement. The Portfolio may return a portion of the interest earned to
the borrower or a third party which is unaffiliated with the Company and
acting as a "placing broker."

The Securities and Exchange Commission (the "SEC") currently requires that
the following lending conditions must be met: (1) the Portfolio must receive
at least 100% collateral from the borrower (cash, U.S. Government securities,
or irrevocable bank letters of credit); (2) the borrower must increase the
collateral whenever the market value of the loaned securities rises above the
level of such collateral; (3) the Portfolio must be able to terminate the
loan at any time; (4) the Portfolio must receive reasonable interest on the
loan, as well as any dividends, interest or other distributions payable on
the loaned securities, and any increase in market value; (5) the Portfolio
may pay only reasonable custodian fees in connection with the loan; and (6)
while voting rights on the loaned securities may pass to the borrower, the
Company's Board of Directors must be able to terminate the loan and regain
the right to vote the securities if a material event adversely affecting the
investment occurs.

Even though loans of portfolio securities are collateralized, a risk of loss
exists if an institution that borrows securities from the Portfolio breaches
its agreement with the Portfolio and the Portfolio is delayed or prevented
from recovering the collateral.

<PAGE>

These instruments include variable amount master demand notes, which are
obligations that permit the Portfolio to invest at varying rates of interest
pursuant to direct arrangements between the Portfolio, as lender, and the
borrower. These notes permit daily changes in the amounts borrowed. Because
they are direct lending arrangements between the lender and borrower, such
instruments generally will not be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. If these
obligations are not secured by letters of credit or other credit support
arrangements, the Portfolio's right to redeem its investment depends on the
ability of the borrower to pay principal and interest on demand. In
connection with floating and variable rate demand obligations, Wilshire will
consider, on an ongoing basis, earning power, cash flow and other liquidity
ratios of the borrower, and the borrower's ability to pay principal and
interest on demand. Such obligations frequently are not rated by credit
rating agencies, and the Portfolio may invest in them only if at the time of
an investment the borrower meets the criteria set forth above for other
commercial paper issuers.

DERIVATIVES. The Portfolio may invest, to a limited extent, in "derivatives".
These are financial instruments which derive their performance at least in
part, from the performance of an underlying asset, index or interest rate.
The derivatives the Portfolio uses are currently comprised of stock index
futures and options. The Portfolio may invest in derivatives for a variety of
reasons, including to hedge against certain market risks, to provide a
substitute for purchasing or selling particular securities or to increase
potential income gain. Derivatives may provide a cheaper, quicker or more
specifically focused way for the Portfolio to invest than "traditional"
securities.

Derivatives permit the Portfolio to increase, decrease or change the level of
risk to which its securities are exposed in much the same way as the
Portfolio can increase, decrease or change the risk of its investments by
making investments in specific securities. However, derivatives can be
volatile and involve various types and degrees of risk, depending upon the
characteristics of the particular derivative and the Portfolio as a whole.
Under certain market conditions, they can increase the volatility of the
Portfolio's net asset value, can decrease the liquidity of the Portfolio's
investments and make more difficult the accurate pricing of the of the
Portfolio's shares.

<PAGE>

In addition, derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in derivatives
could have a large potential impact on the Portfolio's performance. If the
Portfolio invests in derivatives at inappropriate times or judges market
conditions incorrectly, such investments may lower the Portfolio's return or
result in a loss. The Portfolio also could experience losses if its
derivatives were poorly correlated with its other investments, or if the
Portfolio were unable to liquidate its position because of an illiquid
secondary market. The market for many derivatives is, or suddenly can become,
illiquid. Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for derivatives.

When required by the SEC, the Portfolio will set aside permissible liquid
assets in a segregated account to cover its obligations relating to its
purchase of derivatives. To maintain this required cover, the Portfolio may
have to sell portfolio securities at disadvantageous prices or times.
Derivatives may be purchased on established exchanges ("exchange-traded"
derivatives) or through privately negotiated transactions ("over-the-counter"
derivatives). Exchange-traded derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such derivatives. This
guarantee usually is supported by a daily payment system operated by the
clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter derivatives. Therefore, each
party to an over-the-counter derivative bears the risk that the counterparty
will default. Accordingly, Wilshire will consider the creditworthiness of
counterparties to over-the-counter derivatives in the same manner as it would
review the credit quality of a security to be purchased by the Portfolio.
Over-the-counter derivatives are less liquid than exchange-traded derivatives
since the other party to the transaction may be the only investor with
sufficient understanding of the derivative to be interested in bidding for it.

Although the Portfolio will not be a commodity pool, derivatives subject the
Portfolio to the rules of the Commodity Futures Trading Commission which
limit the extent to which the Portfolio can invest in certain derivatives.
The Portfolio may invest in stock index futures contracts for hedging
purposes without limit. However, the Portfolio may not invest in such
contracts for other purposes if the sum of the amount of initial margin
deposits and the premiums paid for unexpired commodity options, other than
for bona fide hedging purposes, exceeds 5% of the liquidation value of the
Portfolio's assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that in the case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5% limitation.

FUTURES TRANSACTIONS. The Portfolio may enter into futures contracts on
particular securities or stock indices in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange. A futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock or stock
index at the close of the last trading day of the contract and the price at
which the agreement is made. No physical delivery of securities is made.

<PAGE>

Engaging in these transactions involves risk of loss to the Portfolio which
could affect the value of the Portfolio's net assets adversely. Although the
Portfolio intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance exists that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a
price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially subjecting
the Portfolio to substantial losses.

Successful use of futures by the Portfolio also is subject to the ability of
Wilshire to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the position being
hedged and the price movements of the futures contract. For example, if the
Portfolio uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Portfolio will lose part or all of the
benefit of the increased value of securities which it has hedged because it
will have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. The Portfolio may
have to sell such securities at a time when it may be disadvantageous to do
so.

Pursuant to regulations and published positions of the SEC, the Portfolio may
be required to segregate cash or liquid assets in connection with its futures
transactions in an amount generally equal to the value of the contract. The
segregation of such assets will have the effect of limiting the Portfolio's
ability otherwise to invest those assets.

OPTIONS. The Portfolio may write covered call options, buy put options, buy
call options and write secured put options on particular securities or the
Wilshire 5000 Index. Options trading is a highly specialized activity which
entails greater than ordinary investment risks. A call option for a
particular security gives the purchaser of the option the right to buy, and a
writer the obligation to sell, the underlying security at the stated exercise
price at any time prior to the expiration of the option, regardless of the
market price of the security. The premium paid to the writer is in
consideration for undertaking the obligations under the option contract. A
put option for a particular security gives the purchaser the right to sell
the underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.

Options on stock indices are similar to options on specific securities,
except that, rather than the right to take or make delivery of the specific
security at a specific price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the
closing level of that stock index is greater than, in the case of a call
option, or less than, in the case of a put option, the exercise price of the
option. This amount of cash is equal to the difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is obligated, in return
for the premium received, to deliver this amount. Unlike options on specific
securities, all settlements of options on stock indices are in cash, and gain
or loss depends on general movements in the stocks included in the index
rather than price movements in particular stock.

6
<PAGE>

OTHER DERIVATIVES. The Portfolio may take advantage of opportunities in the
area of futures contracts and any other derivatives which presently are not
contemplated for use by the Portfolio or which currently are not available
but which may be developed, to the extent such opportunities are both
consistent with the Portfolio's investment objective and legally permissible
for the Portfolio. Before entering into such transactions or making any such
investment, the Portfolio will provide appropriate disclosure in its
prospectus or SAI.

FOREIGN SECURITIES. The Portfolio may include securities of the foreign
issuers included in the Wilshire 5000 Index. Investments in foreign
securities have additional risks, including future political and economic
developments, possible imposition of withholding taxes on income payable on
the securities, the possible establishment of currency exchange controls,
adoption of other foreign governmental restrictions and possible seizure or
nationalization of foreign assets.

PREFERRED STOCK. The Portfolio may invest up to 5% of its assets in preferred
stock. Preferred Stock, unlike common stock, offers a stated dividend rate
payable from a corporation's earnings. Such preferred stock dividends may be
cumulative or non-cumulative, participating or auction rate. If interest
rates rise, the fixed dividend on preferred stocks may be less attractive,
causing the price of preferred stocks to decline. Preferred stock may have
mandatory sinking fund provisions, as well as call/redemption provisions
prior to maturity, a negative feature when interest rates decline. Dividends
on some preferred stock may be "cumulative," requiring all or a portion of
prior unpaid dividends to be paid before dividends are paid on the issuer's
common stock. Preferred stock also generally has a preference over common
stock on the distribution of a corporation's assets in the event of
liquidation of the corporation, and may be "participating," which means that
it may be entitled to a dividend exceeding the stated dividend in certain
cases. The rights of preferred stocks on the distribution of a corporation's
assets in the event of a liquidation are generally subordinate to the rights
associated with a corporation's debt securities.

CONVERTIBLE SECURITIES. The Portfolio may invest up to 5% of its assets in
convertible securities when its appears to Wilshire that it may not be
prudent to be fully invested in common stocks. In evaluating a convertible
security, Wilshire places primary emphasis on the attractiveness of the
underlying common stock and the potential for capital appreciation through
conversion. Convertible securities may include corporate notes or preferred
stock but are ordinarily long-term debt obligations of the issuers
convertible at stated exchange rates into common stock of the issuers. As
with all debt securities, the market value of convertible securities tends to
decline as interest rates increase and, conversely, to increase as interest
rates decline. Convertible securities generally offer lower interest or
dividend yields than non-convertible securities of similar quality. However,
when the market price of the common stock underlying a convertible security
exceeds the conversion price, the price of the convertible security tends to
reflect the value of the underlying common stock. As the market price of the
underlying common stock declines, the convertible security tends to trade
increasingly on a yield basis, and thus may not depreciate to the same extent
as the underlying common stock. Convertible securities rank senior to common
stocks in a issuer's capital structure and are consequently of higher quality
and entail less risk than the issuer's common stock, although the extent to
which such risk is reduced depends in large measure upon the degree to which
the convertible security sells above its value as a fixed income security.

<PAGE>

WARRANTS AND RIGHTS. The Portfolio may invest up to 5% of its assets in
warrants and rights. Warrants are options to purchase equity securities at a
specified price valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights
are similar to warrants, but generally are shorter in duration and are
distributed by the issuer directly to its shareholders. Warrants and rights
have no voting rights, receive no dividends and have no rights to the assets
of the issuer.

INVESTMENT RESTRICTIONS

1. Invest in commodities, except that the Portfolio may purchase and sell
options, forward contracts, and futures contracts, including those relating
to indices, and options on futures contracts or indices.

2. Purchase, hold or deal in real estate or oil, gas or other mineral leases
or exploration or development programs, but the Portfolio may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate.

3. Borrow money, except for temporary or emergency (not leveraging) purposes
in an amount up to 33 1/3% of the value of the Portfolio's total assets
(including the amount borrowed) based on the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. When borrowings exceed 5% of the value of the Portfolio's total assets,
the Portfolio will not make any additional investments. For purposes of this
investment restriction, the entry into options, forward contracts, or futures
contracts, including those relating to indices and options on futures
contracts or indices, will not constitute borrowing.

4. Make loans to others, except through the purchase of debt obligations and
entry into repurchase agreements. However, the Portfolio may lend its
portfolio securities in an amount not to exceed 33 1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the SEC and the Company's Board of Directors.

5. Act as an underwriter of securities of other issuers, except to the extent
the Portfolio may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.

6. Invest more than 25% of its assets in the securities of issuers in any
single industry, provided there will be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

<PAGE>

8. With respect to 75% of the Portfolio's assets, hold more than 10% of the
outstanding voting securities of any single issuer.

The following investment restrictions are non-fundamental and may be changed
by a vote of a majority of the Company's Board of Directors. The Portfolio
may not:

1. Invest in the securities of a company for the purpose of exercising
management or control, but the Portfolio will vote the securities it owns in
its portfolio as a shareholder in accordance with its views.

2. Enter into repurchase agreements providing for settlement in more than
seven days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Portfolio's net assets would be
so invested.

3. Purchase securities of other investment companies, except to the extent
permitted under the 1940 Act or those received as part of a merger or
consolidation.

DIRECTORS AND OFFICERS

DIRECTORS
* Indicates that the Director is an "interested person" of the Company as
defined in the 1940 Act.

NAME: *Thomas D. Stevens
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Chairman of the Board, President and Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing Director and Principal
of Wilshire for more than the past five years. He is the Chief Investment
Officer of the Wilshire Asset Management division of Wilshire. Wilshire Asset
Management is a provider of index and structured equity and fixed income
applications.

<PAGE>

NAME: Dewitt F. Bowman
AGE: 70
ADDRESS: 79 Eucalyptus Knoll, Mill Valley, CA 94941
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since January 1994, Pension
Investment Consultant providing advice on large pension fund investment
strategy, new product evaluation and integration, and large plan investment
analysis and management. Currently a director of the RREEF America REIT,
Dresdner RCM Capital Fund, Inc. and Dresdner RCM Equity Funds, Inc., and
trustee of the Pacific Gas & Electric Nuclear Decommissioning Trust, Brandes
Investment Trust and PCG Private Equity Fund.

NAME: *Robert J. Raab, Jr.
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing Director and Principal
of Wilshire for more than the past five years. He is head of Wilshire's
Institutional Services Division and is responsible for Wilshire Equity, Fixed
Income, Index Fund and Portfolio Accounting products.

NAME: Anne Wexler
AGE: 69
ADDRESS: c/o The Wexler Group, 1317 F Street, N.W., Suite 600, Washington,
D.C. 20004
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Chairman of the Wexler Group,
consultants specializing in government relations and public affairs, for more
than fifteen years. She is also a director of Alumax, The Dreyfus Corporation,
Comcast Corporation, The New England Electric System, Nova Corporation, and
sixteen mutual funds in the Dreyfus mutual fund family. In addition, she is a
member of the Board of the Carter Center of Emory University, the Council of
Foreign Relations, the National Park Foundation, the Visiting Committee of the
John F. Kennedy School of Government at Harvard University and the Board of
Visitors of the University of Maryland School of Public Affairs.

NAME: Cynthia A. Hargadon
AGE: 45
ADDRESS: c/o Potomac Investment Services, L.P., 3 Bethesda Metro Center,
Suite 530
Bethesda, Maryland 20814
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since June 2000, Managing Director of
Potomac Investment Services, L.P. and President of Potomac Asset Management
Company, Inc. Prior to June 2000, Director of Investments for the National
Automobile Dealers Association. From November 1996 to July 1998, President of
Stable Value Investment Association, Inc., educating the public about stable
value as a fixed income alternative and how to use it in the asset allocation
process for defined contribution plan participants. She is also a project
consultant of Johnson Custom Strategies, Inc. an independent investment services
firm providing specialized asset management strategies to institutional clients.
From May 1987 to November 1996, Senior Vice-President and Chief Investment
Officer of ICMA Retirement Corporation, a retirement plan administrator.

<PAGE>

For so long as the plan described in "Service and Distribution Plan" remains
in effect, the Directors of the Company who are not "interested persons" of
the Company, as defined in the 1940 Act, will be selected and nominated by
the Directors who are not "interested persons" of the Company.

The Company pays its Directors who are not "interested persons" of the
Company an annual retainer of $3,000 and a fee of $2,500 per meeting. The
aggregate amount of compensation paid to each current Director by the Company
for the fiscal year ended August 31, 2000, is shown below:

<TABLE>
<CAPTION>
AGGREGATE
NAME OF COMPENSATION
DIRECTOR PAID BY WILSHIRE
<S> <C>
DeWitt F. Bowman $13,000
Cynthia A. Hargadon $13,000
Robert J. Raab, Jr $0
Thomas D. Stevens $0
Anne L. Wexler $13,000
</TABLE>

OFFICERS

NAME: David R. Borger
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Vice President and Treasurer
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of the
Company and Director of Research for its Wilshire Asset Management division for
more than six years.

NAME: Alan L. Manning
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Secretary
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1990, Vice President, Secretary
and General Counsel of the Company.

NAME: Michael J. Napoli, Jr.
AGE: 49
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Vice President
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of the
Company for more than six years. Director of Marketing for Wilshire Asset
Management division.

NAME: Gail A. Hanson

<PAGE>

AGE: 58
ADDRESS: c/o PFPC Inc., 101 Federal Street, Boston, Massachusetts 02110
POSITION: Vice President and Assistant Secretary of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President, PFPC Inc. ("PFPC")
(formerly First Data Investor Services Group, Inc. ("FDISG") since September
1994.

NAME: Robert C. Herforth
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Senior Financial
Administrator of PFPC's (formerly FDISG) Financial Reporting Department. From
1995 to 1997, Financial Administrator of FPS. Prior to 1995, he was a
Supervisor in the Transfer Agent Control Department of FPS.

NAME: George Graner
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1999 Senior Section Manager of
PFPC's (formerly FDISG) Financial Reporting Department. From 1992 to 1999, Mr.
Graner served in various capacities with FPS and PFPC.

NAME: Brian O'Neill
AGE: 32
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Manager of PFPC's
(formerly FDISG) Financial Reporting Department. From 1992 to 1997, Mr. O'Neill
served in various capacities with FPS.

<PAGE>

PRINCIPAL HOLDERS OF SECURITIES

Listed below are the names and addresses of those shareowners who owned of
record or beneficially 5% or more of each class of shares of the Portfolios
as of November 30, 2000. Shareowners who have the power to vote a large
percentage of shares of a particular Portfolio may be in a position to
control the Portfolio and determine the outcome of a shareholder meeting. A
shareowner who owns, directly or indirectly, 25% or more of a Portfolio's
voting securities may be deemed to be a "control person", as defined by the
1940 Act.

Shareholders Percentage Owned
----------- ----------------
Joseph Cecco 5.43%
And Emma Cecco JTWROS
6988 Hillsland Ave
Saint Louis, MO 63109

INVESTMENT ADVISORY AND OTHER SERVICES

EXPENSES. From time to time, Wilshire or Investor Services Group may waive
receipt of its fees and/or voluntarily assume certain expenses of the
Portfolio or the Company, which would have the effect of lowering the overall
expense ratio of the Portfolio and increasing the return to investors at the
time such amounts are waived or assumed, as the case may be. The Company will
not pay Wilshire or PFPC for any amounts which may be waived or assumed. Each
of PFPC Distributors Inc. ("PFPC Distributors"), Wilshire or PFPC may bear
other expenses of distribution of the shares of the Portfolio or of the
provision of shareholder services to the Portfolio's shareholders, including
payments to securities dealers or other financial intermediaries or service
providers, out of its profits and available resources other than the advisory
and administration fees paid by the Company.

All expenses incurred in the operation of the Company are borne by the
Company, except to the extent specifically assumed by PFPC Distributors,
Wilshire or PFPC. The expenses borne by the Company include: organizational
costs; taxes; interest; brokerage fees and commissions, if any; fees of
Directors who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of PFPC Distributors, Wilshire or PFPC
or any of their affiliates; SEC fees; state Blue Sky qualification fees;
advisory and administration fees; charges of custodians; transfer and
dividend disbursing agents' fees; certain insurance premiums; industry
association fees; outside auditing and legal expenses; costs of maintaining
the Company's existence; costs of independent pricing services; costs
attributable to investor services (including, without limitation, telephone
and personnel expenses); costs of shareholders' reports and meetings; costs
of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders; and any extraordinary expenses. Expenses attributable to a
particular series or class of shares are charged against the assets of that
series or class. Other expenses of the Company are allocated among all series
on the basis determined by the Board of Directors, including, but not limited
to, proportionately in relation to the net assets of the series.

INVESTMENT ADVISORY AGREEMENT AND FEES. Wilshire provides investment
advisory services to the Portfolio pursuant to an Investment Advisory Agreement
dated July 11, 1996 (the

13
<PAGE>

"Advisory Agreement"), as amended June 8, 1998. All advisory fees are accrued
daily. For the fiscal year ended August 31, 2000, the advisory fees for the
Portfolio payable to Wilshire, the reductions attributable to voluntary fee
waivers, and the net fees paid with respect to the Portfolio, were as follows:

ADVISORY REDUCTION NET
PORTFOLIO FEE PAYABLE IN FEE FEE PAID

Wilshire 5000 Index Portfolio $107,392 $107,392 $-0-

The Advisory Agreement terminates in the event of its assignment (as defined in
the 1940 Act).

SERVICES AGREEMENT. Wilshire has entered into a Services Agreement, dated May
31, 1999, as amended September 27, 1999, with PFPC (formerly, First Data
Investor Services Group, Inc.), 4400 Computer Drive, Westboro, MA 01581. PFPC
furnishes Wilshire with clerical help, accounting, data processing, internal
auditing, legal services and certain other services as may be required by
Wilshire. PFPC also prepares tax returns, reports to the Portfolio's
shareholders, reports and filings with the SEC and state securities authorities,
provides sales literature review and recommendations for compliance with the
National Association of Securities Dealers, Inc. ("NASD") and SEC rules and
regulations, prepares training materials for use by personnel of the Company or
the Adviser, prepares ongoing compliance updates, coordinates the registration
of the Company with the National Securities Clearing Corp. ("NSCC") and filing
required Company reports with NSCC, provision of advice and counsel to the
Company with respect to regulatory matters, including monitoring regulatory and
legislative developments that may affect the Company and assist in the
preparation of quarterly board materials with regard to sales and other
distribution related data reasonably requested by the board of directors and
generally assists in all aspect of the Company's operations, other than
providing investment advice.

14
<PAGE>

$4 billion, and .08% on the excess net assets. In addition, Wilshire has
agreed to pay PFPC an annual fee of $25,000 for each Portfolio and $2,000 for
each additional class.

Administration and Accounting..................$185,999
Transfer Agency................................$ 42,000

For the fiscal year ended August 31, 2000, the administration fees paid to
PFPC for the Portfolio was $0.

SERVICE AND DISTRIBUTION PLAN. The Service and Distribution Plan (the "Plan") of
the Company adopted pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder was approved as to the Horace Mann Class shares of the Portfolio by
vote of the majority of both (a) the Directors of the Company and (b) those
Directors who are not interested persons of the Company (as defined in the 1940
Act) and have no direct or indirect financial interest in the operation of the
Plan or any agreement related to it (the "Independent Directors"), in each case
cast in person at a meeting called for the purpose of voting on the Plan.

The Plan will continue in effect with respect to the Horace Mann Class shares of
the Portfolio only so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors, cast in person at a meeting called for the purpose of
voting on the Plan. The Plan may not be amended in any material respect with
respect to the Horace Mann Class shares of the Portfolio unless such amendment
is approved by votes of the majority (or whatever other percentage may, from
time to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors of the Company, cast in person at a meeting called for the
purpose of voting on the, and may not be amended to increase materially the
amount to be spent thereunder without such approvals and approval by vote of at
least a majority (as defined in the 1940 Act) of the outstanding shares of the
Horace Mann Class of the Portfolio. The Plan may be terminated at any time with
respect to the Horace Mann Class shares of the Portfolio by vote of a majority
of the Independent Directors or by vote of a majority (as defined in the 1940
Act) of the outstanding shares of the Horace Mann Class of the Portfolio. As of
August 31, 1999 the Horace Mann Class shares of the Portfolio had not commenced
operations and therefore, there are no payments to report under such Plan.

TRANSFER AND DIVIDEND DISBURSING AGENT. PFPC, P.O. Box 5170, Westboro,
Massachusetts 01581, serves as the Company's transfer agent and dividend
disbursing agent.

CUSTODIAN. The Northern Trust Company, located at 50 South Lasalle Street,
Chicago, Illinois 60675, serves as the Portfolio's custodian.

COUNSEL. Paul Hastings, Janofsky & Walker LLP, 535 South Flower Street, Los
Angeles, California 90071-2371, serves as counsel for the Company.

15
<PAGE>

INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, Two Commerce Way, 2001
Market Street, Philadelphia, PA 19103, serves as auditor for the Company.

CODE OF ETHICS

PORTFOLIO TRANSACTIONS

16
<PAGE>

For the fiscal year ended August 31, 2000, the Portfolio paid total
brokerage commissions of $81, 317.00

As of August 31, 2000, the Portfolio held the following securities of its
regular brokers or dealers:

Brokers or Dealers Market Value
------------------ ------------
Morgan Stanley Dean Witter & Co. $774, 450
J.P. Morgan & Co. $167,187
Investment Technology Group, Inc. $ 12,432

No brokerage commissions were paid to the Company's distributor. There were
no spreads or concessions on principal transactions for any such period.

NET ASSET VALUE

The net asset value per share of the Horace Mann Class of Shares of the
Portfolio is calculated as of the close of regular trading of the NYSE on each
day the NYSE is open for trading.

17
<PAGE>

PURCHASE AND REDEMPTION OF SHARES

The following information supplements and should be read in conjunction with the
sections in the Prospectus entitled "How to Purchase Portfolio Shares" and "How
to Sell Portfolio Shares."

THE DISTRIBUTOR. PFPC Distributors Inc. ("PFPC Distributors"), Four Falls
Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428-2961,
serves as the Company's distributor pursuant to an agreement which is
renewable annually by the Board of Directors. The Horace Mann Class shares of
the Portfolio are continuously offered at the net asset value per share next
determined after a proper purchase request has been received and accepted by
the Company. The Distribution Agreement between the Distributor and the
Company provides that the Company shall indemnify the Distributor against any
liability arising out of any untrue statement of a material fact or any
omission of a material fact in the Company's registration statement necessary
to make the statements therein misleading, unless such liability results from
the Distributor's willful misfeasance, bad faith or negligence in the
performance of its duties under the Agreement.

SIGNATURES. Written redemption requests must be signed by each shareholder,
including each holder of a joint account, and each signature must be guaranteed
if the amount redeemed exceeds $50,000 or, if proceeds are to be paid to someone
other than the registered holder of Shares or if the investor's address of
record has changed within the past 60 days. The Transfer Agent has adopted
standards and procedures pursuant to which signature guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature Guaranteed" must appear with the signature. The Transfer Agent may
request additional documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification arrangements
from foreign investors, such as consular verification. For more information with
respect to signature guarantees, please call the telephone number listed on the
cover.

18
<PAGE>

DIVIDENDS, DISTRIBUTION AND TAXES

The following information supplements and should be read in conjunction with the
sections in the Prospectus entitled "Dividends and Distribution Information" and
"Tax Information."

REGULATED INVESTMENT COMPANIES

19
<PAGE>

similar trades or businesses; and (c) distribute at least 90% of its
investment company taxable income (which includes dividends, interest, and
net short-term capital gains in excess of net long-term capital losses) each
taxable year.

Because the Portfolio is established in part as an investment for certain
insurance variable annuity contacts, the Code imposes additional diversification
requirements on the Portfolio. Generally, these requirements are that at each
quarter end and for 30 days thereafter no more than 55% of the Portfolio's total
assets may be in any one investment, no more than 70% in any two investments,
nor more than 80% in any three investments, and no more than 90% in any four
investments.

The Portfolio generally will be subject to a nondeductible excise tax of 4% to
the extent that it does not meet certain minimum distribution requirements as of
the end of each calendar year. To avoid the tax, the Portfolio must distribute
during each calendar year an amount equal to the sum of (1) at least 98% of its
ordinary income and net capital gain (not taking into account any capital gains
or losses as an exception) for the calendar year, (2) at least 98% of its
capital gains in excess of its capital losses (and adjusted for certain ordinary
losses) for the twelve month period ending on October 31 of the calendar year,
and (3) all ordinary income and capital gains for previous years that were no
distributed during such years. A distribution will be treated as paid on
December 31 of the calendar year if it is declared by the Portfolio in October,
November, or December of that year to shareholders of record on a date in such a
month and paid by the Portfolio during January of the following year. Such
distributions will be taxable to shareholders (other than those not subject to
federal income tax) in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are received.
To avoid the excise tax, the Portfolio intends to make timely distributions of
their income in compliance with these requirements and anticipate that it will
not be subject to the excise tax.

Dividends paid by the Portfolio from ordinary income, and distributions of the
Portfolio's net realized short-term capital gains, are taxable to its
shareholders as ordinary income. Distributions to corporate shareholders will be
eligible for the 70% dividends received deduction to the extent that the income
of the Portfolio is derived from dividends on common or preferred stock of
domestic corporations. Dividend income earned by the Portfolio will be eligible
for the dividends received deduction only if the Portfolio has satisfied a
46-day holding period requirement (described below) with respect to the
underlying portfolio security (91 days in the case of dividends derived from
preferred stock). In addition, a corporate shareholder must have held its shares
in the Portfolio for not less than 46 days during the 90-day period that begins
45 days before the stock becomes ex-dividend with respect to the dividend (91
days during the 180-day period that begins 90 days before the stock becomes
ex-dividend with respect to the dividend in the case of dividends derived from
preferred stock) in order to claim the dividend received deduction. Within 60
days after the end of its taxable year, the Portfolio will send to its
shareholders a written notice designating the amount of any distributions made
during such year which may be taken into account by its shareholders for
purposes of such deduction provisions of the Code. Net capital gain
distributions are not eligible for the dividends received deduction.

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<PAGE>

Under the Code, any distributions designated as being made from net capital
gains are taxable to the Portfolio's shareholders as long-term capital gains,
regardless of the holding period of such shareholders. Such distributions of net
capital gains will be designated by the Portfolio as a capital gains
distribution in a written notice to its shareholders which accompanies the
distribution payment. Any loss on the sale of shares held for less than six
months will be treated as a long-term capital loss for federal tax purposes to
the extent a shareholder receives net capital gain distributions on such shares.
The maximum federal income tax rate applicable to long-term capital gains is
currently 28% (20% on property sold after July 28, 1997 that was held more than
18 months) for individual shareholders and 35% for corporate shareholders.
Dividends and distributions are taxable as such whether received in cash or
reinvested in additional shares of the Portfolio.

Any loss realized on a sale, redemption or exchange of shares of the Portfolio
by a shareholder will be disallowed to the extent the shares are replaced within
a 61-day period (beginning 30 days before the disposition of shares). Shares
purchased pursuant to the reinvestment of a dividend will constitute a
replacement of shares.

HEDGING TRANSACTIONS

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OTHER TAX INFORMATION

The Portfolio may be required to withhold for U.S. federal income taxes 31% of
all taxable distributions payable to shareholders who fail to provide the
Company with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service that
they are subject to backup withholding. Corporate shareholders and certain other
shareholders specified in the Code generally are exempt from such backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against the shareholder's U.S. federal income tax liability.

The Company may also be subject to state or local taxes in certain other states
where it is deemed to be doing business. Further, in those states which have
income tax laws, the tax treatment of the Company and of shareholders of the
Portfolio with respect to distributions by the Portfolio may differ from federal
tax treatment. Distributions to shareholders may be subject to additional state
and local taxes. Shareholders should consult their own tax advisers regarding
specific questions as to federal, state or local taxes.

Any dividend or distribution paid shortly after an investor's purchase may have
the effect of reducing the aggregate net asset value of his or her shares below
the cost of his or her investment. Such a dividend or distribution would be a
return on investment in an economic sense. In addition, the Code provides that
if a shareholder holds shares of the Portfolio for six months or less and has
received a long-term capital gain distribution with respect to such shares, any
loss incurred on the sale of such shares will be treated as a long-term capital
loss to the extent of the long-term capital gain distribution received.

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<PAGE>

PERFORMANCE INFORMATION

Performance will vary from time to time and past results are not necessarily
representative of future results. You should remember that performance is a
function of portfolio management and is also affected by operating expenses,
market conditions and the risks associated with a Portfolio's objective and
investment policies. Performance information, such as that described above, may
not provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.

The Portfolio's total return (not annualized) for the fiscal year ended
August 31, 2000 were as follows:

Since Inception*

Wilshire 5000 Index Portfolio 22.87%

* Horace Mann Class Shares commenced operations on December 10, 1999.

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OTHER INFORMATION

Each share of the Portfolio has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares of each class of the Portfolio have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights and
are freely transferable.

The Company will send annual and semi-annual financial statements to all its
shareholders.

FINANCIAL STATEMENTS

<PAGE>

WILSHIRE TARGET FUNDS, INC.

LARGE COMPANY GROWTH PORTFOLIO
LARGE COMPANY VALUE PORTFOLIO
SMALL COMPANY GROWTH PORTFOLIO
SMALL COMPANY VALUE PORTFOLIO
WILSHIRE 5000 INDEX PORTFOLIO

INVESTMENT CLASS SHARES
INSTITUTIONAL CLASS SHARES

STATEMENT OF ADDITIONAL INFORMATION
(http://www.wilfunds.com)

December 20, 2000

This Statement of Additional Information ("SAI") provides supplementary
information for the investment portfolios of Wilshire Target Funds, Inc.
("Company"): Large Company Growth Portfolio, Large Company Value Portfolio,
Small Company Growth Portfolio, Small Company Value Portfolio and Wilshire 5000
Index Portfolio (each a "Portfolio" and collectively the "Portfolios").

This Statement of Additional Information is not a prospectus, and it should
be read in conjunction with the prospectus for the Portfolios dated December
20, 2000. You can obtain the Portfolios' prospectus by contacting us at:
Wilshire Target Funds, Inc., P.O. Box 60488, King of Prussia, Pennsylvania
19406-0488, 888-200-6796.

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Portfolios.................................................. 2
Investment Policies and Risks................................... 2
Investment Restrictions......................................... 8
Directors and Officers.......................................... 9
Principal Holders of Securities................................. 13
Investment Advisory and Other Services.......................... 16
Code of Ethics.................................................. 21
Portfolio Transactions.......................................... 21
Net Asset Value................................................. 23
Purchase of Portfolio Shares.................................... 23
Redemption of Portfolio Shares.................................. 24
Shareholder Services............................................ 26
Dividends, Distribution and Taxes............................... 27
Performance Information......................................... 30
Other Information............................................... 32
Financial Statements............................................ 32
</TABLE>

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THE PORTFOLIOS

The Company is a diversified, open-end investment management company that
currently offers shares of a number of series and classes, including Investment
Class Shares and Institutional Class Shares for the following Portfolios: Large
Company Growth Portfolios, Large Company Value Portfolios, Small Company Growth
Portfolios, Small Company Value Portfolio and Wilshire 5000 Index Portfolio. The
Company also offers other classes of shares of the Wilshire 5000 Index Portfolio
in separate prospectuses.

INVESTMENT POLICIES AND RISKS

All Portfolios may invest in the investments described below, except as
otherwise indicated.

U.S. GOVERNMENT SECURITIES. Each Portfolio may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, which
include U.S. Treasury securities of various interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities are supported by the full faith and credit of
the U.S. Treasury. Others are supported by the right of the issuer to borrow
from the Treasury, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality, or by the
credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.

MONEY MARKET INSTRUMENTS. Each Portfolio may invest in money market
instruments, including certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by domestic banks,
foreign subsidiaries or branches of domestic banks, domestic and foreign
branches of foreign banks, domestic savings and loan associations and other
banking institutions.

A certificate of deposit is a negotiable certificate requiring a bank to
repay funds deposited with it for a specified period of time.

A time deposit is a non-negotiable deposit maintained in a banking
institution for a specified period of time at a stated interest rate. A
Portfolio will only invest in time deposits of domestic banks that have total
assets in excess of one billion dollars. Time deposits held by the Portfolios
will not benefit from insurance administered by the Federal Deposit Insurance
Corporation.

A bankers' acceptance is a credit instrument requiring a bank to pay a draft
drawn on it by a customer. These instruments reflect the obligation both of
the bank and of the drawer to pay the face amount of the instrument upon
maturity. Other short-term bank obligations in which the Portfolios may
invest may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.

With respect to such securities issued by foreign branches and subsidiaries of
domestic banks, and domestic and foreign branches of foreign banks, a Portfolio
may be subject to additional investment risks that are different in some
respects from those incurred by a Portfolio which

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invests only in debt obligations of U.S. domestic issuers. Such risks include
possible future political and economic developments, possible seizure or
nationalization of foreign deposits, the possible imposition of foreign
withholding taxes on interest income, the possible establishment of exchange
controls or the adoption of other foreign governmental restrictions which may
adversely affect the payment of principal and interest on these securities.

REPURCHASE AGREEMENTS. In a repurchase agreement, a Portfolio buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thus determines
the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
A repurchase agreement involves risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or
restrictions upon the Portfolio's ability to dispose of the underlying
securities. The Company's custodian or sub-custodian will hold in a
segregated account the securities acquired by a Portfolio under a repurchase
agreement. Repurchase agreements are considered, under the Investment Company
Act of 1940, as amended (the "1940 Act"), to be loans by the Portfolios. To
try to reduce the risk of loss on a repurchase agreement, the Portfolios will
enter into repurchase agreements only with domestic banks with total assets
in excess of one billion dollars, only with respect to securities of the type
in which the Portfolio may invest, and will require that additional
securities be deposited with the custodian or sub-custodian if the value of
the securities purchased decreases below the repurchase price.

LENDING PORTFOLIO SECURITIES. The Portfolios may seek additional income by
lending their securities on a short-term basis to banks, brokers and dealers
under agreement. A Portfolio may return a portion of the interest earned to
the borrower or a third party which is unaffiliated with the Company and
acting as a "placing broker."

The Securities and Exchange Commission (the "SEC") currently requires that
the following lending conditions must be met: (1) the Portfolio must receive
at least 100% collateral from the borrower (cash, U.S. Government securities,
or irrevocable bank letters of credit); (2) the borrower must increase the
collateral whenever the market value of the loaned securities rises above the
level of such collateral; (3) the Portfolio must be able to terminate the
loan at any time; (4) the Portfolio must receive reasonable interest on the
loan, as well as any dividends, interest or other distributions payable on
the loaned securities, and any increase in market value; (5) the Portfolio
may pay only reasonable custodian fees in connection with the loan; and (6)
while voting rights on the loaned securities may pass to the borrower, the
Company's Board of Directors must be able to terminate the loan and regain
the right to vote the securities if a material event adversely affecting the
investment occurs.

Even though loans of portfolio securities are collateralized, a risk of loss
exists if an institution that borrows securities from a Portfolio breaches
its agreement with the Portfolio and the Portfolio is delayed or prevented
from recovering the collateral.

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<PAGE>

ZERO COUPON SECURITIES. Each Portfolio, except the Wilshire 5000 Index
Portfolio, may invest in zero coupon U.S. Treasury securities, which are
Treasury notes and bonds that have been stripped of their unmatured interest
coupons, the coupons themselves, and receipts or certificates representing
interests in such stripped debt obligations and coupons. Each such Portfolio
also may invest in zero coupon securities issued by corporations and
financial institutions which constitute a proportionate ownership of the
issuer's pool of underlying U.S. Treasury securities. A zero coupon security
pays no interest to its holder during its life and is sold at a discount to
its face value at maturity. The amount of the discount fluctuates with the
market price of the security. The market prices of zero coupon securities
generally are more volatile than the market prices of securities that pay
interest periodically and are likely to respond more to changes in interest
rates than non-zero coupon securities with similar maturities and credit
qualities.

COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial paper
is a short-term, unsecured promissory note issued to finance short-term
credit needs. The commercial paper purchased by a Portfolio will consist only
of direct obligations which, at the time of their purchase, are (a) rated at
least Prime-1 by Moody's Investors Service, Inc., A-1 by Standard & Poor's
Ratings Group, F-1 by Fitch Investors Service, L.P. or D-1 by Duff & Phelps
Credit Rating Co.; (b) issued by companies having an outstanding unsecured
debt issue rated at least Aa3 by Moody's Investors Service, Inc. or AA- by
Standard & Poor's Ratings Group, Fitch Investors Service, L.P. or Duff &
Phelps Credit Rating Co.; or (c) if unrated, determined by the Company to be
of comparable quality.

These instruments include variable amount master demand notes, which are
obligations that permit a Portfolio to invest at varying rates of interest
pursuant to direct arrangements between the Portfolio, as lender, and the
borrower. These notes permit daily changes in the amounts borrowed. Because
they are direct lending arrangements between the lender and borrower, such
instruments generally will not be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. If these
obligations are not secured by letters of credit or other credit support
arrangements, a Portfolio's right to redeem its investment depends on the
ability of the borrower to pay principal and interest on demand. In
connection with floating and variable rate demand obligations, Wilshire will
consider, on an ongoing basis, earning power, cash flow and other liquidity
ratios of the borrower, and the borrower's ability to pay principal and
interest on demand. Such obligations frequently are not rated by credit
rating agencies, and a Portfolio may invest in them only if at the time of an
investment the borrower meets the criteria set forth above for other
commercial paper issuers.

DERIVATIVES. Each Portfolio may invest, to a limited extent, in
"derivatives." These are financial instruments which derive their performance
at least in part, from the performance of an underlying asset, index or
interest rate. The derivatives the Portfolios use are currently comprised of
stock index futures and options. The Portfolios may invest in derivatives for
a variety of reasons, including to hedge against certain market risks, to
provide a substitute for purchasing or selling particular securities or to
increase potential income gain. Derivatives may provide a cheaper, quicker or
more specifically focused way for the Portfolio to invest than "traditional"
securities.

Although the Wilshire 5000 Index Portfolio does not currently intend to
invest in derivatives, it reserves the right to do so in the future.
Normally, less than 5% of the Portfolio's net assets would be invested in
derivatives.

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<PAGE>

Derivatives permit a Portfolio to increase, decrease or change the level of
risk to which its securities are exposed in much the same way as the
Portfolio can increase, decrease or change the risk of its investments by
making investments in specific securities. However, derivatives can be
volatile and involve various types and degrees of risk, depending upon the
characteristics of the particular derivative and the Portfolio as a whole.
Under certain market conditions, they can increase the volatility of the
Portfolio's net asset value, can decrease the liquidity of the Portfolio's
investments and make more difficult the accurate pricing of the of the
Portfolio's shares.

In addition, derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in derivatives
could have a large potential impact on a Portfolio's performance. If a
Portfolio invests in derivatives at inappropriate times or judges market
conditions incorrectly, such investments may lower the Portfolio's return or
result in a loss. A Portfolio also could experience losses if its derivatives
were poorly correlated with its other investments, or if the Portfolio were
unable to liquidate its position because of an illiquid secondary market. The
market for many derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for derivatives.

When required by the SEC, a Portfolio will set aside permissible liquid
assets in a segregated account to cover its obligations relating to its
purchase of derivatives. To maintain this required cover, a Portfolio may
have to sell portfolio securities at disadvantageous prices or times.
Derivatives may be purchased on established exchanges ("exchange-traded"
derivatives) or through privately negotiated transactions ("over-the-counter"
derivatives). Exchange-traded derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such derivatives. This
guarantee usually is supported by a daily payment system operated by the
clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter derivatives. Therefore, each
party to an over-the-counter derivative bears the risk that the counterparty
will default. Accordingly, Wilshire will consider the creditworthiness of
counterparties to over-the-counter derivatives in the same manner as it would
review the credit quality of a security to be purchased by a Portfolio.
Over-the-counter derivatives are less liquid than exchange-traded derivatives
since the other party to the transaction may be the only investor with
sufficient understanding of the derivative to be interested in bidding for it.

Although no Portfolio will be a commodity pool, derivatives subject a
Portfolio to the rules of the Commodity Futures Trading Commission which
limit the extent to which a Portfolio can invest in certain derivatives. Each
Portfolio may invest in stock index futures contracts for hedging purposes
without limit. However, no Portfolio may invest in such contracts for other
purposes if the sum of the amount of initial margin deposits and the premiums
paid for unexpired commodity options, other than for bona fide hedging
purposes, exceeds 5% of the liquidation value of the Portfolio's assets,
after taking into account unrealized profits and unrealized losses on such
contracts it has entered into; provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount
may be excluded in calculating the 5% limitation.

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<PAGE>

FUTURES TRANSACTIONS. A Portfolio may enter into futures contracts on
particular securities or stock indices in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange. A futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock or stock
index at the close of the last trading day of the contract and the price at
which the agreement is made. No physical delivery of securities is made.

Engaging in these transactions involves risk of loss to a Portfolio which
could affect the value of such Portfolio's net assets adversely. Although
each Portfolio intends to purchase or sell futures contracts only if there is
an active market for such contracts, no assurance exists that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a
price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially subjecting
a Portfolio to substantial losses.

Successful use of futures by a Portfolio also is subject to the ability of
Wilshire to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the position being
hedged and the price movements of the futures contract. For example, if a
Portfolio uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Portfolio will lose part or all of the
benefit of the increased value of securities which it has hedged because it
will have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. A Portfolio may have
to sell such securities at a time when it may be disadvantageous to do so.

Pursuant to regulations and published positions of the SEC, a Portfolio may
be required to segregate cash or liquid assets in connection with its futures
transactions in an amount generally equal to the value of the contract. The
segregation of such assets will have the effect of limiting a Portfolio's
ability otherwise to invest those assets.

OPTIONS. The Wilshire 5000 Index Portfolio may write covered call options,
buy put options, buy call options and write secured put options on particular
securities or the Wilshire 5000 Index. Options trading is a highly
specialized activity which entails greater than ordinary investment risks. A
call option for a particular security gives the purchaser of the option the
right to buy, and a writer the obligation to sell, the underlying security at
the stated exercise price at any time prior to the expiration of the option,
regardless of the market price of the security. The premium paid to the
writer is in consideration for undertaking the obligations under the option
contract. A put option for a particular security gives the purchaser the
right to sell the underlying security at the stated exercise price at any
time prior to the expiration date of the option, regardless of the market
price of the security.

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Options on stock indices are similar to options on specific securities,
except that, rather than the right to take or make delivery of the specific
security at a specific price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the
closing level of that stock index is greater than, in the case of a call
option, or less than, in the case of a put option, the exercise price of the
option. This amount of cash is equal to the difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is obligated, in return
for the premium received, to deliver this amount. Unlike options on specific
securities, all settlements of options on stock indices are in cash, and gain
or loss depends on general movements in the stocks included in the index
rather than price movements in particular stock.

OTHER DERIVATIVES. A Portfolio may take advantage of opportunities in the
area of futures contracts and any other derivatives which presently are not
contemplated for use by the Portfolios or which currently are not available
but which may be developed, to the extent such opportunities are both
consistent with the Portfolio's investment objective and legally permissible
for the Portfolio. Before entering into such transactions or making any such
investment, the Portfolio will provide appropriate disclosure in its
prospectus or SAI.

FOREIGN SECURITIES. Each Portfolio may include securities of the foreign
issuers included in the Wilshire 5000 Index. Investments in foreign
securities have additional risks, including future political and economic
developments, possible imposition of withholding taxes on income payable on
the securities, the possible establishment of currency exchange controls,
adoption of other foreign governmental restrictions and possible seizure or
nationalization of foreign assets.

PREFERRED STOCK. The Wilshire 5000 Index Portfolio may invest up to 5% of its
assets in preferred stock. Preferred Stock, unlike common stock, offers a
stated dividend rate payable from a corporation's earnings. Such preferred
stock dividends may be cumulative or non-cumulative, participating or auction
rate. If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as call/redemption
provisions prior to maturity, a negative feature when interest rates decline.
Dividends on some preferred stock may be "cumulative," requiring all or a
portion of prior unpaid dividends to be paid before dividends are paid on the
issuer's common stock. Preferred stock also generally has a preference over
common stock on the distribution of a corporation's assets in the event of
liquidation of the corporation, and may be "participating," which means that
it may be entitled to a dividend exceeding the stated dividend in certain
cases. The rights of preferred stocks on the distribution of a corporation's
assets in the event of a liquidation are generally subordinate to the rights
associated with a corporation's debt securities.

CONVERTIBLE SECURITIES. The Wilshire 5000 Index Portfolio may invest up to 5%
of its assets in convertible securities when its appears to Wilshire that it
may not be prudent to be fully invested in common stocks. In evaluating a
convertible security, Wilshire places primary emphasis on the attractiveness
of the underlying common stock and the potential for capital appreciation
through conversion. Convertible securities may include corporate notes or
preferred stock but are ordinarily long-term debt obligations of the issuers
convertible at stated exchange rates into common stock of the issuers. As
with all debt securities, the market value of convertible

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securities tends to decline as interest rates increase and, conversely, to
increase as interest rates decline. Convertible securities generally offer
lower interest or dividend yields than non-convertible securities of similar
quality. However, when the market price of the common stock underlying a
convertible security exceeds the conversion price, the price of the
convertible security tends to reflect the value of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus
may not depreciate to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks in a issuer's capital
structure and are consequently of higher quality and entail less risk than
the issuer's common stock, although the extent to which such risk is reduced
depends in large measure upon the degree to which the convertible security
sells above its value as a fixed income security.

WARRANTS AND RIGHTS. The Wilshire 5000 Index Portfolio may invest up to 5% of
its assets in warrants and rights. Warrants are options to purchase equity
securities at a specified price valid for a specific period of time. Their
prices do not necessarily move parallel to the prices of the underlying
securities. Rights are similar to warrants, but generally are shorter in
duration and are distributed by the issuer directly to its shareholders.
Warrants and rights have no voting rights, receive no dividends and have no
rights to the assets of the issuer.

INVESTMENT RESTRICTIONS

The investment restrictions described below are fundamental policies of each
Portfolio and cannot be changed without the approval of a majority of the
Portfolio's outstanding voting shares (as defined by the 1940 Act). All
percentage limitations apply only at the time of the transaction. Subsequent
changes in value or in a Portfolio's total assets will not result in a
violation of the percentage limitations. No Portfolio may:

1. Invest in commodities, except that a Portfolio may purchase and sell
options, forward contracts, and futures contracts, including those relating
to indices, and options on futures contracts or indices.

2. Purchase, hold or deal in real estate or oil, gas or other mineral leases
or exploration or development programs, but a Portfolio may purchase and sell
securities that are secured by real estate or issued by companies that invest
or deal in real estate.

3. Borrow money, except for temporary or emergency (not leveraging) purposes
in an amount up to 33 1/3% of the value of the Portfolio's total assets
(including the amount borrowed) based on the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. When borrowings exceed 5% of the value of a Portfolio's total assets,
the Portfolio will not make any additional investments. For purposes of this
investment restriction, the entry into options, forward contracts, or futures
contracts, including those relating to indices and options on futures
contracts or indices, will not constitute borrowing.

4. Make loans to others, except through the purchase of debt obligations and
entry into repurchase agreements. However, each Portfolio may lend its
portfolio securities in an amount not to exceed 33 1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the SEC and the Company's Board of Directors.

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5. Act as an underwriter of securities of other issuers, except to the extent
the Portfolio may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.

6. Invest more than 25% of its assets in the securities of issuers in any
single industry, provided there will be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

7. Invest more than 5% of its assets in the obligations of
any single issuer, except that up to 25% of the value of a Portfolio's total
assets may be invested, and securities issued or guaranteed by the U.S.
Government, or its agencies or instrumentalities may be purchased, without
regard to any such limitation.

8. With respect to 75% of a Portfolio's assets, hold more than 10% of the
outstanding voting securities of any single issuer.

The following investment restrictions are non-fundamental and may be changed
by a vote of a majority of the Company's Board of Directors. No Portfolio may:

1. Invest in the securities of a company for the purpose of exercising
management or control, but a Portfolio will vote the securities it owns in
its portfolio as a shareholder in accordance with its views.

2. Enter into repurchase agreements providing for settlement in more than
seven days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Portfolio's net assets would be
so invested.

3. Purchase securities of other investment companies, except to the extent
permitted under the 1940 Act or those received as part of a merger or
consolidation.

DIRECTORS AND OFFICERS

Under Maryland law, the business and affairs of the Portfolios and the
Company are managed under the direction of the Board of Directors.
Information pertaining to the Directors and officers is set forth below.

DIRECTORS

* Indicates that the Director is an "interested person" of the Company as
defined in the 1940 Act.

NAME: *Thomas D. Stevens
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700
Santa Monica, California 90401

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POSITION: Chairman of the Board, President and Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing Director and Principal
of Wilshire for more than the past five years. He is the Chief Investment
Officer of the Wilshire Asset Management division of Wilshire. Wilshire Asset
Management is a provider of index and structured equity and fixed income
applications.

NAME: Dewitt F. Bowman
AGE: 70
ADDRESS: 79 Eucalyptus Knoll, Mill Valley, California 94941
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since January 1994, Pension
Investment Consultant providing advice on large pension fund investment
strategy, new product evaluation and integration, and large plan investment
analysis and management. Currently a director of the RREEF America REIT,
Dresdner RCM Capital Fund, Inc. and Dresdner RCM Equity Funds, Inc., and
trustee of the Pacific Gas & Electric Nuclear Decommissioning Trust, Brandes
Investment Trust and PCG Private Equity Fund.

NAME: *Robert J. Raab, Jr.
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700
Santa Monica, California 90401
POSITION: Director
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS: Senior Managing Director and
Principal of Wilshire for more than the past five years. He is head of
Wilshire's Institutional Services Division and is responsible for Wilshire
Equity, Fixed Income, Index Fund and Portfolio Accounting products.

10
<PAGE>

November 1996 to July 1998, President of Stable Value Investment Association,
Inc., educating the public about stable value as a fixed income alternative
and how to use it in the asset allocation process for defined contribution
plan participants. She is also a project consultant of Johnson Custom
Strategies, Inc. an independent investment services firm providing
specialized asset management strategies to institutional clients. From May
1987 to November 1996, Senior Vice-President and Chief Investment Officer of
ICMA Retirement Corporation, a retirement plan administrator.

OFFICERS

NAME: David R. Borger
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Vice President and Treasurer
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of the
Company and Director of Research for its Wilshire Asset Management division for
more than six years.

NAME: Alan L. Manning
AGE: 51
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Secretary
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1990, Vice President,
Secretary and General Counsel of the Company.

NAME: Michael J. Napoli, Jr.

<PAGE>

AGE: 49
ADDRESS: c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Suite 700,
Santa Monica, California 90401
POSITION: Vice President
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Vice President and Principal of
the Company for more than six years. Director of Marketing for Wilshire
Asset Management division.

NAME: Robert C. Herforth
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Senior Financial
Administrator of PFPC's (formerly FDISG) Financial Reporting Department.
From 1995 to 1997, Financial Administrator of FPS. Prior to 1995, he was a
Supervisor in the Transfer Agent Control Department of FPS.

NAME: George Graner
AGE: 31
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1999 Senior Section Manager
of PFPC's (formerly FDISG) Financial Reporting Department. From 1992 to
1999, Mr. Graner served in various capacities with FPS and PFPC.

NAME: Brian O'Neill
AGE: 32
ADDRESS: c/o PFPC Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania
19406
POSITION: Assistant Treasurer of the Company
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS. Since 1997, Manager of PFPC's
(formerly FDISG) Financial Reporting Department. From 1992 to 1997, Mr.
O'Neill served in various capacities with FPS.

As of November 30, 2000, the Directors and officers of the Company as a group
owned less than 1% of the outstanding shares of each class of the Portfolios.
Wilshire is controlled by its President, Dennis Tito, who owns a majority of
its outstanding voting stock.

12
<PAGE>

PRINCIPAL HOLDERS OF SECURITIES

Listed below are the names and addresses of those shareowners who owned of
record or beneficially 5% or more of each class of shares of the Portfolios as
of November 30, 2000. Shareowners who have the power to vote a large percentage
of shares of a particular Portfolio may be in a position to control the
Portfolio and determine the outcome of a shareholder meeting. A shareowner who
owns, directly or indirectly, 25% or more of a Portfolio's voting securities may
be deemed to be a "control person," as defined by the 1940 Act.

LARGE COMPANY GROWTH PORTFOLIO
Investment Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 63.76%
Attn: Mutual Funds
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104
</TABLE>

LARGE COMPANY GROWTH PORTFOLIO
Institutional Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 31.97%
Attn: Mutual Funds
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104

Horace Mann Life Insurance Company 14.10%
1 Horace Mann Plaza
Springfield, IL 62715

Cincinnati Bell Collectively 12.69%
Bargained Retirees Health Corp. TR.
Mail Location: 102-732
201 E 4th Street
Cincinnati, OH 45202

FTC & Co. 8.07%
Attn: Datalynk #093
P.O. Box 173736
Denver, CO 80217
</TABLE>

13
<PAGE>

LARGE COMPANY VALUE PORTFOLIO
Investment Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 50.32%
Attn: Mutual Funds Dept.
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104

FT & CO 10.05%
ATTN Datalynk #001
P.O. Box 173736
Denver, CO 80217

National Investors Services Corp. 7.68%
Exclusively FBO Our Customers
55 Water St., FL 32
New York, NY 10041
</TABLE>

LARGE COMPANY VALUE PORTFOLIO
Institutional Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Cincinnati Bell Collectively 32.76%
Bargained Retirees Heath Care TR
Mail Location: 102-732
201 E 4th St.
Cincinnati, OH 45202
</TABLE>

SMALL COMPANY GROWTH PORTFOLIO
Investment Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 47.01%
Attn: Mutual Funds
Reinvest Account
101 Montgomery St.
San Francisco, CA 94104

Charles Schwab & Co. 5.79%
Attn: Mutual Funds Dept.
Cash Account
101 Montgomery St.
San Francisco, CA 94104
</TABLE>

14
<PAGE>

SMALL COMPANY GROWTH PORTFOLIO
Institutional Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Cincinnati Bell Collectively 97.22%
Bargained Retirees Health Care TR
Mail Location : 102-732
201E 4th St.
Cincinnati, OH 45202
</TABLE>

SMALL COMPANY VALUE PORTFOLIO
Investment Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 33.15%
Mutual Funds Dept.
Reinvest Account
101 Montgomery St.
San Francisco, CA 94104

National Investor Services Corp. 18.82%
Exclusively FBO Customers
55 Water Street
32nd Floor
New York, NY 10041
</TABLE>

SMALL COMPANY VALUE PORTFOLIO
Institutional Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Cincinnati Bell Collectively 89.03%
Bargained Retirees Health Care TR
Mail Location : 102-732
201 E 4th St.
Cincinnati, OH 45202

Charles Schwab & Co. 7.07%
Mutual Fund Department,
Reinvest Account,
101 Montgomery Street,
San Fransisco, CA 94104
</TABLE>

WILSHIRE 5000 INDEX PORTFOLIO
Investment Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Charles Schwab & Co. 48.29%
Attn: Mutual Funds
Reinvest Account
101 Montgomery St.
San Francisco, CA 94104

Centurion Trust Co. 19.45%
Omnibus Centurion Capital Management
2425 E Camelback Road,
Suite 530
Phoenix, AZ 85016
</TABLE>

15
<PAGE>

WILSHIRE 5000 INDEX PORTFOLIO
Institutional Class

<TABLE>
<CAPTION>
SHAREHOLDERS PERCENTAGE OWNED
------------ ----------------
<S> <C>
Horace Mann Life Insurance Co. 65.92%
Separate Account
Attn: Chris Cervellone
1 Horace Mann Plaza
Springfield, IL 62715

Washington Dental Service 18.36%
P.O. Box 75688
Seatle, WA 98125

Saxon & Co.
FBO 20 70 002 36 00461
P.O. Box 7780 188b
Philadelphia, PA 19182 6.23%
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

EXPENSES. From time to time, Wilshire or PFPC may waive receipt of its fees
and/or voluntarily assume certain expenses of the Portfolios or the Company,
which would have the effect of lowering the overall expense ratio of the
Portfolios and increasing the return to investors at the time such amounts
are waived or assumed, as the case may be. The Company will not pay Wilshire
or PFPC for any amounts which may be waived or assumed. Each of PFPC
Distributors Inc. ("PFPC Distributors"), Wilshire or PFPC may bear other
expenses of distribution of the shares of a Portfolio or of the provision of
shareholder services to a Portfolio's shareholders, including payments to
securities dealers or other financial intermediaries or service providers,
out of its profits and available resources other than the advisory and
administration fees paid by the Company.

All expenses incurred in the operation of the Company are borne by the
Company, except to the extent specifically assumed by PFPC Distributors,
Wilshire or PFPC. The expenses borne by the Company include: organizational
costs; taxes; interest; brokerage fees and commissions, if any; fees of
Directors who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of PFPC Distributors, Wilshire or PFPC
or any of their affiliates; SEC fees; state Blue Sky qualification fees;
advisory and administration fees; charges of custodians; transfer and
dividend disbursing agents' fees; certain insurance premiums; industry
association fees; outside auditing and legal expenses; costs of maintaining
the Company's existence; costs of independent pricing services; costs
attributable to investor services (including, without limitation, telephone
and personnel expenses); costs of shareholders' reports and meetings; costs
of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders; and any extraordinary expenses. Expenses attributable to a
particular series or class of shares are charged against the

16
<PAGE>

assets of that series or class. Other expenses of the Company are allocated
among the Portfolios on the basis determined by the Board of Directors,
including, but not limited to, proportionately in relation to the net assets
of each Portfolio.

INVESTMENT ADVISORY AGREEMENT AND FEES. Wilshire provides investment advisory
services to the Portfolios pursuant to an Investment Advisory Agreement dated
July 11, 1996, (the "Advisory Agreement") as amended June 8, 1998. All
advisory fees are accrued daily. For the fiscal years ended August 31, 1998,
1999 and 2000, the advisory fees for each Portfolio payable to Wilshire, the
reductions attributable to voluntary fee waivers, and the net fees paid with
respect to the Portfolios, were as follows:

1998

<TABLE>
<CAPTION>
ADVISORY REDUCTION NET
PORTFOLIO FEE PAYABLE IN FEE FEE PAID

<S> <C> <C> <C>
Large Company Growth Portfolio $340,667 $59,495 $281,172
Large Company Value Portfolio $165,814 $34,117 $131,697
Small Company Growth Portfolio $ 50,422 $30,253 $ 20,169
Small Company Value Portfolio $122,710 $73,626 $ 49,084

</TABLE>

1999

<TABLE>
<CAPTION>
ADVISORY REDUCTION NET
PORTFOLIO FEE PAYABLE IN FEE FEE PAID

<S> <C> <C> <C>
Large Company Growth Portfolio $790,268 $0 $790,268
Large Company Value Portfolio $189,219 $0 $189,219
Small Company Growth Portfolio $ 38,857 $ 23,318 $ 15,539
Small Company Value Portfolio $ 99,467 $ 59,706 $ 39,761
Wilshire 5000 Index Portfolio $ 34,528 $ 34,528 $0

</TABLE>

2000

<TABLE>
<CAPTION>
ADVISORY REDUCTION NET
PORTFOLIO FEE PAYABLE IN FEE FEE PAID

<S> <C> <C> <C>
Large Company Growth Portfolio $1,689,994 $-0- $1,689,994
Large Company Value Portfolio $186,906 $-0- $186,906
Small Company Growth Portfolio $ 37,976 $22,791 $15,185
Small Company Value Portfolio $ 68,383 $41,000 $27,383
Wilshire 5000 Index Portfolio $107,392 $144,592 $-0-

</TABLE>

The Advisory Agreement provides that Wilshire shall exercise its best
judgment in rendering the services to be provided to the Portfolios under the
Agreement. Wilshire is not liable under the Advisory Agreement for any error
of judgment or mistake of law or for any loss suffered by the Portfolios.
Wilshire is not protected, however, against any liability to the Portfolios
or its shareholders to which Wilshire would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties under the Advisory Agreement or by reason of Wilshire's reckless
disregard of its obligations and duties under the Advisory

17
<PAGE>
Agreement.

The Advisory Agreement is terminable with respect to any Portfolio without
penalty on 60 days' notice by the Company's Board of Directors, by vote of a
majority of the Portfolio's outstanding shares (as defined in the 1940 Act), or
on at least 90 days' notice by Wilshire.

The Advisory Agreement terminates in the event of its assignment (as defined in
the 1940 Act).

SERVICES AGREEMENT. Wilshire has entered into a Services Agreement, dated May
31, 1999, as amended on September 27, 1999, with PFPC (formerly FDISG), 4400
Computer Drive, Westboro, MA 01581. PFPC furnishes Wilshire with clerical help,
accounting, data processing, internal auditing, legal services and certain other
services as may be required by Wilshire. PFPC also prepares tax returns, reports
to each Portfolios shareholders, reports and filings with the SEC and state
securities authorities provides sales literature review and recommendations for
compliance with the National Association of Securities Dealers, Inc. ("NASD")
and SEC rules and regulations, prepares training materials for use by personnel
of the Company or the Adviser, prepares ongoing compliance updates, coordinates
the registration of the Company with the National Securities Clearing Corp.
("NSCC") and filing required Company reports with NSCC, provision of advice and
counsel to the Company with respect to regulatory matters, including monitoring
regulatory and legislative developments that may affect the Company and assist
in the preparation of quarterly board materials with regard to sales and other
distribution related data reasonably requested by the board of directors and
generally assists in all aspect of the Company's operations, other than
providing investment advice.

As compensation for PFPC's services under the Services Agreement, PFPC is
entitled to receive from the Company a monthly administration fee at the annual
rate of 0.15% of the Company's monthly average net assets up to aggregate assets
of $1 billion, 0.10% of such value on the next $4 billion, and .08% on the
excess net assets. In addition, Wilshire has agreed to pay PFPC an annual fee of
$25,000 for each Portfolio and $2,000 for each additional class.

18
<PAGE>

For the fiscal years ended August 31, 1998, 1999 and 2000, the administration
fees paid to PFPC for each Portfolio were as follows:

<TABLE>

<CAPTION>
Portfolio ADMINISTRATION ADMINISTRATION ADMINISTRATION
FEE PAID 1998 FEE PAID 1999 FEE PAID 2000
------------- ------------- -------------
<S> <C> <C> <C>
Large Company Growth $231,401 $501,171 $1,041,056
Portfolio
Large Company Value $126,488 $140,541 $139,203
Portfolio
Small Company Growth $57,253 $ 50,318 $50,911
Portfolio
Small Company Value $100,626 $ 86,652 $68,132
Portfolio
Wilshire 5000 Index N/A $0 $0
Portfolio

</TABLE>

With respect to the Wilshire 5000 Index Portfolio, PFPC has agreed to waive
certain administration and accounting fees, transfer agent and fund accounting
flat fees for a period of three years from inception.

For the year ended august 31, 2000, PFPC voluntarily waived fees as follows:

<TABLE>
<S> <C>
Administration and Accounting.........................................$ 185,999

Transfer Agency.......................................................$ 42,000
</TABLE>

SERVICE AND DISTRIBUTION PLAN. The Service and Distribution Plan (the "Plan")
of the Company adopted pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder was approved as to the Investment Class shares of the Portfolios by
vote of the majority of both (a) the Directors of the Company and (b) those
Directors who are not interested persons of the Company (as defined in the 1940
Act) and have no direct or indirect financial interest in the operation of the
Plan or any agreement related to it (the "Independent Directors"), in each case
cast in person at a meeting called for the purpose of voting on the Plan.

The Plan will continue in effect with respect to the Investment Class shares of
a Portfolio only so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors, cast in person at a meeting called for the purpose of
voting on the Plan. The Plan may not be amended in any material respect with
respect to the Investment Class shares of a Portfolio unless such amendment is
approved by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the 1940 Act or the rules and
regulations thereunder) of both (a) the Directors of the Company and (b) the
Independent Directors of the Company, cast in person at a meeting called for the
purpose of voting on the, and may not be amended to increase materially the
amount to be spent thereunder without such

19
<PAGE>

approvals and approval by vote of at least a majority (as defined in
the 1940 Act) of the outstanding shares of the Investment Class of the
Portfolio. The Plan may be terminated at any time with respect to the
Investment Class shares of a Portfolio by vote of a majority of the
Independent Directors or by vote of a majority (as defined in the 1940 Act)
of the outstanding shares of the Investment Class of the Portfolio. Amounts
spent on behalf of each Portfolio pursuant to such Plan during the fiscal
year ended August 31, 2000, are set forth below.

<TABLE>
<CAPTION>
COMPENSATION
TO BROKER
PORTFOLIO 12B-1 AND PRINTING DEALERS

<S> <C> <C>
Large Company Growth Portfolio $114, 969.11 $ 1, 110, 762.87
Large Company Value Portfolio $ 21, 355.73 $ 30, 297.28
Small Company Growth Portfolio $ 2, 501.85 $ 16, 315.98
Small Company Value Portfolio $ 5, 674.34 $ 16, 655.91
Wilshire 5000 Index Portfolio $ 26, 292.65 $ 236, 605.77
</TABLE>

<TABLE>
<CAPTION>
COMPENSATION
TO SALES
PORTFOLIO PERSONNEL OTHER TOTAL

<S> <C> <C> <C>
Large Company Growth Portfolio $0 $ $
Large Company Value Portfolio $0 $ $
Small Company Growth Portfolio $0 $ $
Small Company Value Portfolio $0 $ $
Wilshire 5000 Index Portfolio $0 $ $
</TABLE>

TRANSFER AND DIVIDEND DISBURSING AGENT PFPC, P.O. Box 5170, Westboro,
Massachusetts 01581, serves as the Company's transfer agent and dividend
disbursing agent.

CUSTODIAN. The Northern Trust Company, located at 50 South LaSalle Street,
Chicago, Illinois 60675, serves as the Portfolios' custodian.

COUNSEL. Paul Hastings, Janofsky & Walker LLP, 535 South Flower Street, Los
Angeles, California 90071-2371, serves as counsel for the Company.

INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, Two Commerce Way,
2001 Market Street, Philadelphia, PA, 19103, serves as auditor for the
Company.

20
<PAGE>

CODE OF ETHICS

Each person covered by the Code of Ethics is prohibited from purchasing or
selling any security which, to such person's knowledge, is being purchased or
sold (as the case maybe), or is being considered for purchase or sale, by a
Portfolio. Investment personnel are subject to additional restrictions such as a
ban on acquiring securities in an initial public offering, "blackout periods"
which prohibit trading by investment personnel of a Portfolio within periods of
trading by the Portfolio in the same security and a ban on short-term trading in
securities. Investment personnel are required to preclear any personal
securities investment (with limited exceptions, such as government securities)
and must comply with ongoing requirements concerning recordkeeping and
disclosure of personal securities investments. The preclearance requirement and
associated procedures are designed to identify any prohibition or limitation
applicable to a proposed investment.

PORTFOLIO TRANSACTIONS

Wilshire supervises the placement of orders on behalf of each Portfolio for the
purchase or sale of portfolio securities. Portfolio transactions are allocated
among broker-dealers in the best judgment of Wilshire and in a manner deemed
fair and reasonable to shareholders. The primary consideration is prompt
execution of orders at the most favorable net price. Subject to this
consideration, the brokers selected may include those that supplement Wilshire's
research facilities with statistical data, investment information, economic
facts and opinions. Information so received is in addition to and not in lieu of
services required to be performed by Wilshire and its fees are not reduced by
the receipt of such supplemental information. Such information may be useful to
Wilshire in serving both the Portfolios and other clients which it advises and,
conversely, supplemental information obtained by the placement of business of
other clients may be useful to Wilshire in carrying out its obligations to the
Portfolios. Brokers also are selected because of their ability to handle special
executions such as are involved in large block trades or broad distributions,
provided the primary consideration is met. When transactions are executed in the
over-the-counter market, the Portfolios will deal with the primary market makers
unless a more favorable price or execution otherwise is obtainable.

Although Wilshire makes investment decisions for the Portfolios independently
from those of its other accounts, investments of the kind made by the Portfolios
may often also be made by such other accounts. When Wilshire buys or sells the
same security at substantially the same time on behalf of the Portfolios and one
or more other accounts managed by Wilshire, it allocates available investments
by such means as, in its judgment, result in fair treatment. Wilshire aggregates
orders for purchases and sales of securities of the same issuer on the same day
among the Portfolios and their other managed accounts, and the price paid to or
received by the Portfolios and those accounts is the average obtained in those
orders. In some cases, such aggregation and allocation procedures may affect
adversely the price paid or received by the Portfolios or the size of the
position purchased or sold by the Portfolios.

21
<PAGE>

Portfolio turnover may vary from year to year, as well as within a year. Under
normal market conditions, each Portfolio's turnover rate generally will not
exceed 80%. High turnover rates, generally as a result of fluctuating market
conditions, are likely to result in comparatively greater brokerage expenses.
Recognizing this, Wilshire attempts to minimize the cost per share of trading
while at the same time implementing only those trades necessary to maintain the
proper style exposure.

For the fiscal years ended August 31, 1998, 1999, and 2000, the Portfolios
paid total brokerage commissions as follows:

<TABLE>
<CAPTION> 1998 1999 2000

<S> <C> <C> <C>
Large Company Growth Portfolio $77,370 $187,845 $206, 974
Large Company Value Portfolio $17,486 $ 29,188 $ 73, 431
Small Company Growth Portfolio $19,555 $ 36,855 $ 20, 490
Small Company Value Portfolio $58,188 $ 76,000 $ 62, 304
Wilshire 5000 Index Portfolio N/A $ 62,049 $ 81, 317
</TABLE>

As of August 31, 2000, the Portfolios held the following securities of their
regular brokers or dealers:

<TABLE>
<CAPTION>
Large Company Growth Portfolio
BROKERS OR DEALERS MARKET VALUE
<S> <C>
Morgan Stanley Dean Witter & Co. $11, 121, 963
<CAPTION>
Large Company Value Portfolio
BROKERS OR DEALERS MARKET VALUE
<S> <C>
JP Morgan & Co. $1,688,594.00
<CAPTION>
Small Company Growth Portfolio
BROKERS OR DEALERS MARKET VALUE
<S> <C>
Investment Tech. Group, Inc. $22,560.00
<CAPTION>
Small Company Value Portfolio

22
<PAGE>

BROKERS OR DEALERS MARKET VALUE
<S> <C>
None N/A
<CAPTION>
Wilshire 5000 Index Portfolio
BROKERS OR DEALERS MARKET VALUE
<S> <C>
JP Morgan & Co. $ 167,187.00
Morgan Stanley Witter & Co. $ 774,450.00
Investment Tech. Group, Inc. $ 12,432.00
</TABLE>

No brokerage commissions were paid to the Company's distributor. There
were no spreads or concessions on principal transactions for any such period.

NET ASSET VALUE

The net asset value per share of each class of each Portfolio is calculated
as of the close of regular trading of the NYSE on each day the NYSE is open
for trading.

Each Portfolio's investment securities are valued at the last sale price on
the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Short-term
investments are valued at amortized cost. Any securities or other assets for
which recent market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Directors. Expenses and fees, including the advisory and administration fees,
are accrued daily and taken into account for the purpose of determining the
net asset value of each Portfolio's shares.

PURCHASE OF PORTFOLIO SHARES

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "How to Buy Portfolio Shares."

THE DISTRIBUTOR. PFPC Distributors Inc. ("PFPC Distributors"), Four Falls
Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428-2961, serves
as the Company's distributor pursuant to an agreement which is renewable
annually by the Board of Directors. PFPC Distributors sells each Portfolio's
shares on a continuous basis as agent, but is not obligated to sell any
particular amount of shares. The Distribution Agreement between the Distributor
and the Company provides that the Company shall indemnify the Distributor
against any liability arising out of any untrue statement of a material fact or
any omission of a material fact in the Company's registration statement
necessary to make the statements therein misleading, unless such liability
results from the Distributor's willful misfeasance, bad faith or negligence in
the performance of its duties under the Agreement.

TRANSACTIONS THROUGH SECURITIES DEALERS. Portfolio shares may be purchased
and redeemed

23
<PAGE>

through securities dealers, which may charge a transaction fee for such
services. Some dealers will place the Portfolio's shares in an account with
their firm. Dealers also may require that the customer invest more than the
$2,500 minimum investment, the customer not request redemption checks to be
issued in the customer's name, fractional shares not be purchased, or other
conditions.

There is no sales or service charge to individual investors by the Company or
by PFPC Distributors, although investment dealers, banks and other
institutions may make reasonable charges to investors for their services. The
services provided and the applicable fees are established by each dealer or
other institution acting independently of the Company. The Company
understands that these fees may be charged for customer services including,
but not limited to, same-day investment of client funds; same-day access to
client funds; advice to customers about the status of their accounts, yield
currently being paid or income earned to date; provision of periodic account
statements showing security and money market positions; and assistance with
inquiries related to their investment. Any such fees may be deducted from the
investor's account monthly and on smaller accounts could constitute a
substantial portion of any distribution by the Portfolios. Small, inactive,
long-term accounts involving monthly service charges may not be in the best
interest of investors. Investors should be aware that they may purchase
shares of the Portfolios directly through PFPC Distributors without any
maintenance or service charges, other than those described above.

IN-KIND PURCHASES. Payments for each Portfolio's shares may, at the
discretion of the Company, be made in the form of securities which are
permissible investments for the Portfolio. For further information about this
form of payment, please contact the Transfer Agent. Generally, securities
which are accepted by a Portfolio as payment for the Portfolio's shares will
be valued using the Portfolio's procedures for valuing its own shares at the
time the Portfolio's net asset value is next determined after receipt of a
properly completed order. All dividends, interest, subscription or other
rights pertaining to such securities will become the property of the
Portfolio and must be delivered to the Portfolio upon receipt from the
issuer. The Portfolio will require that (1) it will have good and marketable
title to the securities received by it; (2) the securities are in proper form
for transfer to the Portfolio and are not subject to any restriction on sale
by the Portfolio under the Securities Act of 1933, as amended, or otherwise;
and (3) the Portfolio receives such other documentation as the Company may,
in its discretion, deem necessary or appropriate. Investors who are subject
to Federal taxation may realize a gain or loss for Federal income tax purpose
upon such a payment.

24
<PAGE>

REDEMPTION OF PORTFOLIO SHARES

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "How to Sell Portfolio Shares."

WIRE REDEMPTION PRIVILEGE. By using this Privilege, the investor authorizes
the Transfer Agent to act on wire or telephone redemption instructions from
any person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Company will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt if the Transfer Agent receives the redemption
request in proper form. Redemption proceeds ($2,500 minimum) will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder Services
Form, or to a correspondent bank if the investor's bank is not a member of
the Federal Reserve System. Fees ordinarily are imposed by such bank and
usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.

To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."

SIGNATURES. Written redemption requests must be signed by each
shareholder, including each holder of a joint account, and each signature
must be guaranteed if the amount redeemed exceeds $50,000, of if proceeds are
to be paid to someone other than the registered holder of shares or if the
investor's address of record has changed within the past 60 days. The
Transfer Agent has adopted standards and procedures pursuant to which
signature guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature Guaranteed"
must appear with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators, trustees or
guardians, and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more information with
respect to signature guarantees, please call the telephone number listed on
the cover.

REDEMPTION COMMITMENT. The Board of Directors reserves the right to make
payments in whole or in part in securities or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Portfolio to the detriment of the existing shareholders. In such event, the
securities would be readily marketable, to the extent available, and would be
valued in the same manner as the Portfolio's investment securities are
valued. If the recipient sold such securities, brokerage charges would be
incurred.

SUSPENSION OF REDEMPTIONS. The Company may suspend the right of redemption
with respect to any Portfolio or postpone the date of payment (a) during any
period when the New York Stock

25
<PAGE>

Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Portfolio ordinarily utilizes is restricted,
or when an emergency exists as determined by the SEC so that disposal of the
investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the SEC by order may permit to
protect the shareholders.

NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which the New
York Stock Exchange is closed currently are: New Year's Day, Presidents' Day,
Rev. Martin Luther King, Jr. Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction with
the section in the Prospectus entitled "Shareholder Information."

EXCHANGES. By using the Telephone Exchange Privilege, you authorize the
Transfer Agent to act on telephonic instructions from any person representing
himself or herself to be you and reasonably believed by the Transfer Agent to
be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted.

To establish a personal retirement plan by exchange, shares of the series
being exchanged must have a value of at least the minimum initial investment
required for the series into which the exchange is being made. For Keogh
Plans, IRAs and IRAs set up under a Simplified Employee Pension Plan
("SEP-IRAs") with only one participant, the minimum initial investment is
$750. To exchange shares held in corporate plans, 403(b)(7) Plans and
SEP-IRAs with more than one participant, the minimum initial investment is
$100 if the plan has at least $2,500 invested among the series of the
Company. To exchange shares held in personal retirement plans, the shares
exchanged must have a current value of at least $100.

The exchange service is available to shareholders resident in any state in
which shares of the series being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other identifying
designations.

The Company reserves the right to reject any exchange request in whole or in
part. The exchange service may be modified or terminated at any time upon
notice to shareholders.

CORPORATE PENSION/PROFIT-SHARING AND PERSONAL RETIREMENT PLANS. The Company
makes available to corporations a variety of prototype pension and
profit-sharing plans. In addition, Wilshire makes available Keogh Plans,
IRAs, including SEP-IRAs and IRA "Rollover Accounts," and 403(b)(7) Plans.
Plan support services also are available. Investors can obtain details on the
various plans by calling toll-free: 888-200-6796.

The custodian for Keogh Plans, 403(b)(7) Plans or IRAs may charge a fee,
payment of which could require the liquidation of shares. All fees charged
are described in the appropriate form.

26
<PAGE>

Shares may be purchased in connection with these plans only by direct
remittance to the Plan as custodian. Purchases for these plans may not be
made in advance of receipt of funds.

The minimum initial investment for corporate plans, 403(b)(7) Plans and
SEP-IRAs with more than one participant is $2,500 with no minimum for
subsequent purchases. The minimum initial investment for Keogh Plans, IRAs,
SEP-IRAs and 403(b)(7) Plans with only one participant is normally $750, with
no minimum for subsequent purchases. Individuals who open an IRA may also
open a non-working spousal IRA with a minimum investment of $250.

You should read the prototype retirement plan and the appropriate form of
custodial agreement for further details on eligibility, service fees and tax
implications, and should consult a tax adviser.

DIVIDENDS, DISTRIBUTION AND TAXES

REGULATED INVESTMENT COMPANIES

The Company's management believes that each Portfolio qualified as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code") for the fiscal year ended August 31, 2000. Qualification
as a regulated investment company relieves the Portfolio from any liability
for Federal income taxes to the extent that its earnings are distributed in
accordance with the applicable provisions of the Code. The term "regulated
investment company" does not imply the supervision of management or
investment practices or policies by any government agency.

As a regulated investment company, a Portfolio will not be liable for federal
income tax on its income and gains provided it distributes all of its income
and gains currently. Qualification as a regulated investment company under
the Code requires, among other things, that each Portfolio (a) derive at
least 90% of its gross income from dividends, interest, payments with respect
to securities loans, and gains from the sale or other disposition of
securities or foreign currencies, or other income (including, but not limited
to, gains from options, futures or forward contracts) derived with respect to
its business of investing in such securities or currencies; (b) diversify its
holdings so that, at the end of each fiscal quarter, (i) at least 50% of the
market value of the Portfolio's assets is represented by cash, U.S.
Government securities and securities of other regulated investment companies,
and other securities (for purposes of this calculation generally limited, in
respect of any one issuer, to an amount not greater than 5% of the market
value of the Portfolio's assets and 10% of the outstanding voting securities
of such issuer) and (ii) not more than 25% of the value of its assets is
invested in the securities of any one issuer (other than U.S. Government
securities or the securities of other regulated investment companies), or two
or more issuers which the Company controls and which are determined to be
engaged in the same or similar trades or businesses; and (c) distribute at
least 90% of its investment company taxable income (which includes dividends,
interest, and net short-term capital gains in excess of net long-term capital
losses) each taxable year.

Because the Wilshire 5000 Index Portfolio is established in part as an
investment for certain

27
<PAGE>

insurance variable annuity contacts, the Code imposes additional
diversification requirements on the Portfolio. Generally, these requirements
are that at each quarter end and for 30 days thereafter no more than 55% of
the Portfolio's total assets may be in any one investment, no more than 70%
in any two investments, nor more than 80% in any three investments, and no
more than 90% in any four investments.

A Portfolio generally will be subject to a nondeductible excise tax of 4% to
the extent that it does not meet certain minimum distribution requirements as
of the end of each calendar year. To avoid the tax, a Portfolio must
distribute during each calendar year an amount equal to the sum of (1) at
least 98% of its ordinary income and net capital gains (not taking into
account any capital gains or losses as an exception) for the calendar year,
(2) at least 98% of its capital gains in excess of its capital losses (and
adjusted for certain ordinary losses) for the twelve month period ending on
October 31 of the calendar year, and (3) all ordinary income and capital
gains for previous years that were not distributed during such years. A
distribution will be treated as paid on December 31 of the calendar year if
it is declared by a Portfolio in October, November, or December of that year
to shareholders of record on a date in such a month and paid by the Portfolio
during January of the following year. Such distributions will be taxable to
shareholders (other than those not subject to federal income tax) in the
calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. To avoid the excise
tax, the Portfolios intend to make timely distributions of their income in
compliance with these requirements and anticipate that they will not be
subject to the excise tax.

Dividends paid by a Portfolio from ordinary income, and distributions of the
Portfolio's net realized short-term capital gains, are taxable to its
shareholders as ordinary income. Distributions to corporate shareholders will
be eligible for the 70% dividends received deduction to the extent that the
income of the Portfolios is derived from dividends on common or preferred
stock of domestic corporations. Dividend income earned by a Portfolio will be
eligible for the dividends received deduction only if the Portfolio has
satisfied a 46-day holding period requirement (described below) with respect
to the underlying portfolio security (91 days in the case of dividends
derived from preferred stock). In addition, a corporate shareholder must have
held its shares in the Portfolio for not less than 46 days during the 90-day
period that begins 45 days before the stock becomes ex-dividend with respect
to the dividend (91 days during the 180-day period that begins 90 days before
the stock becomes ex-dividend with respect to the dividend in the case of
dividends derived from preferred stock) in order to claim the dividend
received deduction. Within 60 days after the end of its taxable year, each
Portfolio will send to its shareholders a written notice designating the
amount of any distributions made during such year which may be taken into
account by its shareholders for purposes of such deduction provisions of the
Code. Net capital gain distributions are not eligible for the dividends
received deduction.

Under the Code, any distributions designated as being made from net capital
gains are taxable to a Portfolio's shareholders as long-term capital gains,
regardless of the holding period of such shareholders. Such distributions of
net capital gains will be designated by each Portfolio as a capital gains
distribution in a written notice to its shareholders which accompanies the
distribution payment. Any loss on the sale of shares held for less than six
months will be treated as a long-term capital loss for federal tax purposes
to the extent a shareholder receives net capital gain distributions on such
shares. The maximum federal income tax rate applicable to long-term capital
gains is currently 28% (20% on property sold after July 28, 1997 that was
held more than

28
<PAGE>

18 months) for individual shareholders and 35% for corporate shareholders.
Dividends and distributions are taxable as such whether received in cash or
reinvested in additional shares of a Portfolio.

Any loss realized on a sale, redemption or exchange of shares of a Portfolio
by a shareholder will be disallowed to the extent the shares are replaced
within a 61-day period (beginning 30 days before the disposition of shares).
Shares purchased pursuant to the reinvestment of a dividend will constitute a
replacement of shares.

HEDGING TRANSACTIONS

Ordinarily, gains and losses realized from portfolio transactions will be
treated as a capital gain or loss. All or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income under
Section 1258. "Conversion transactions" are defined to include certain
futures, option and "straddle" transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to
be issued in the future.

Under Section 1256 of the Code, a gain or loss realized by a Portfolio from
certain financial futures transactions will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Gain or loss
will arise upon the exercise or lapse of such futures as well as from closing
transactions. In addition, any such futures remaining unexercised at the end
of the Portfolio's taxable year will be treated as sold for their then fair
market value, resulting in additional gain or loss to the Portfolio
characterized in the manner described above.

Offsetting positions held by a Portfolio involving financial futures may
constitute "straddles." Straddles are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
straddles is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Section 1256.
As such, all or a portion of any short- or long-term capital gain from
certain "straddle" and/or conversion transactions may be recharacterized to
ordinary income.

If a Portfolio were treated as entering into straddles by reason of its
futures transactions, such straddles could be characterized as "mixed
straddles" if the futures transactions comprising such straddles were
governed by Section 1256 of the Code. A Portfolio may make one or more
elections with respect to "mixed straddles." Depending upon which election is
made, if any, the results to the Portfolio may differ. If no election is
made, to the extent the straddle rules apply to positions established by a
Portfolio, losses realized by the Portfolio will be deferred to the extent of
unrealized gain in any offsetting positions. Moreover, as a result of the
straddle rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gain on
straddle positions may be recharacterized as short-term capital gain, and as
a result of the conversion transaction rules, long-term capital gain may be
recharacterized as ordinary income.

Under Section 1259 of the Code, enacted as part of the Taxpayer Relief Act of
1997, a Portfolio will recognize gain if it enters into a futures contract
relating to an appreciated direct position in any stock or debt instrument,
or if it acquires stock or a debt instrument at a time when the Portfolio has
an offsetting appreciated position in the stock or debt instrument. Such
transactions

29
<PAGE>

are considered to be constructive sales for income tax purposes.

OTHER TAX INFORMATION

The Portfolios may be required to withhold for U.S. federal income taxes 31%
of all taxable distributions payable to shareholders who fail to provide the
Company with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service
that they are subject to backup withholding. Corporate shareholders and
certain other shareholders specified in the Code generally are exempt from
such backup withholding. Backup withholding is not an additional tax. Any
amounts withheld may be credited against the shareholder's U.S. federal
income tax liability.

The Company may also be subject to state or local taxes in certain other
states where it is deemed to be doing business. Further, in those states
which have income tax laws, the tax treatment of the Company and of
shareholders of a Portfolio with respect to distributions by the Portfolio
may differ from federal tax treatment. Distributions to shareholders may be
subject to additional state and local taxes. Shareholders should consult
their own tax advisers regarding specific questions as to federal, state or
local taxes.

Any dividend or distribution paid shortly after an investor's purchase may
have the effect of reducing the aggregate net asset value of his or her
shares below the cost of his or her investment. Such a dividend or
distribution would be a return on investment in an economic sense. In
addition, the Code provides that if a shareholder holds shares of the
Portfolios for six months or less and has received a long-term capital gain
distribution with respect to such shares, any loss incurred on the sale of
such shares will be treated as a long-term capital loss to the extent of the
long-term capital gain distribution received.

PERFORMANCE INFORMATION

For purposes of advertising, performance may be calculated on the basis of
average annual total returns and/or total returns of the Portfolios. "Total
return" is the change in value of an investment in a Portfolio for a
specified period. The "average annual total return" of a Portfolio is the
average annual compound rate of return in an investment in the Portfolio
assuming the investment has been held for one-, five- and ten year periods
(or the life of the Portfolio if shorter).

Performance will vary from time to time and past results are not necessarily
representative of future results. You should remember that performance is a
function of portfolio management and is also affected by operating expenses,
market conditions and the risks associated with a Portfolio's objective and
investment policies. Performance information, such as that described above,
may not provide a basis for comparison with other investments or other
investment companies using a different method of calculating performance.

Comparative performance information may be used from time to time in
advertising or marketing the shares of the Portfolios, including data from
the Wilshire 5000 Index, Lipper Analytical Services, Inc., the Standard &
Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average,
Morningstar, Inc. and other industry publications.

30
<PAGE>

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value per share with
a hypothetical $1,000 payment made at the beginning of the period (assuming
the reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "nth" root of the quotient (where "n" is
the number of years in the period) and subtracting 1 from the result.

Total return is calculated by subtracting the amount of the net asset value
per share at the beginning of a stated period from the net asset value per
share at the end of the period (after giving effect to the reinvestment of
dividends and distributions during the period), and dividing the result by
the net asset value per share at the beginning of the period.

INVESTMENT CLASS SHARES - AVERAGE ANNUAL TOTAL RETURN

<TABLE>
<CAPTION>
Since
1 year 5 year inception*+
------ ------ -----------
<S> <C> <C> <C>
Large Company Growth Portfolio 28.84% 29.68% 22.36%
Large Company Value Portfolio 1.71% 14.08% 13.49%
Small Company Growth Portfolio (33.43%) 10.04% 13.28%
Small Company Value Portfolio (5.83%) 6.06% 7.68%
Wilshire 5000 Index Portfolio 19.14% N/A 13.91%

</TABLE>

* Investment Class Shares for all Portfolios (except the Wilshire 5000 Index
Portfolio) commenced operations on September 30, 1992.
+ Wilshire 5000 Index Portfolio commenced operations on February 1, 1999.

INSTITUTIONAL CLASS SHARES - AVERAGE ANNUAL TOTAL RETURN

<TABLE>
<CAPTION>
Since
1 year inception*+
------ -----------
<S> <C> <C>
Large Company Growth Portfolio 29.23% 32.65%
Large Company Value Portfolio 2.06% 13.94%
Small Company Growth Portfolio (33.86%) 11.00%
Small Company Value Portfolio (5.61%) 5.83%
Wilshire 5000 Index Portfolio 19.45% 14.17%

* Institutional Class Shares for all Portfolios (except the Wilshire 5000 Index
Portfolio) commenced operations on July 15, 1996.
+ Wilshire 5000 Index Portfolio commenced operations on February 1, 1999.

</TABLE>

31
<PAGE>

OTHER INFORMATION

The Company is a Maryland corporation organized on July 30, 1992. It
currently has five Portfolios - Large Company Growth Portfolio, Large Company
Value Portfolio, Small Company Growth Portfolio, Small Company Value
Portfolio and Wilshire 5000 Index Portfolio -- each of which has several
classes of shares.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an
investment company, such as the Company, will not be deemed to have been
effectively acted upon unless approved by the holders of the outstanding
shares of each series affected by such matter. Rule 18f-2 further provides
that a series shall be deemed to be affected by a matter unless it is clear
that the interests of all series in the matter are identical or that the
matter does not affect any interest of such series. However, the Rule exempts
the selection of independent accountants and the election of Directors from
the separate voting requirements of the Rule. Rule 18f-3 under the 1940 Act
makes further provision for the voting rights of each class of shares of an
investment company which issues more than one class of voting shares. In
particular, Rule 18f-3 provides that each class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to the
class' arrangement for services and expenses, and shall have separate voting
rights on any matter submitted to shareholders in which the interests of one
class differ from the interests of any other class.

The Company will send annual and semi-annual financial statements to all its
shareholders.

FINANCIAL STATEMENTS

The Company's audited financial statements for the Portfolios contained in
its annual report for the fiscal year ended August 31, 2000 are incorporated
into this Statement of Additional Information by reference in their entirety.
Such financial statements for the fiscal years ended August 31, 1998, 1999,
and 2000 have been audited by the Company's independent auditors,
PricewaterhouseCoopers LLP, whose report thereon appears in such Annual
Report. Such financial statements have been incorporated herein in reliance
upon such report given upon their authority as experts in accounting and
auditing.

32
<PAGE>

WILSHIRE TARGET FUNDS, INC.

PART C - OTHER INFORMATION

Item 23.

Exhibits:

(a) Articles of Incorporation dated July 30, 1992 is incorporated
by reference to Exhibit (1)(a)of Post-Effective Amendment No. 3
to the Registration Statement on Form N-1A which was filed on
November 12, 1993 ("Post-Effective Amendment No. 3").

Articles of Amendment dated August 20, 1992 to the Articles of
Incorporation is incorporated by reference to Exhibit (1)(b) of
Post-Effective Amendment No. 3.

Articles Supplementary to the Articles of Incorporation
classifying shares of each Series of the Fund is incorporated
by reference to Exhibit (1)(d) of Post-Effective Amendment No.
8 to the Registration Statement on Form N-1A which was filed on
April 2, 1996 ("Post-Effective Amendment No. 8").

Articles of Amendment to the Articles of Incorporation amending
the name of the Fund and the name of a class of shares of each
Series of the Fund is incorporated by reference to Post-Effective
Amendment No. 8.

Articles Supplementary dated June 24, 1997 to the Articles of
Incorporation establishing and classifying shares of the
Intermediate Portfolio Corporate Bond and Long-Term Corporate
Bond Portfolio of the Fund is incorporated by reference to
Post-Effective Amendment No. 11 to the Registration Statement
on Form N-1A which was filed on July 10, 1997 ("Post-Effective
Amendment No. 11").

Articles Supplementary dated June 8, 1998 to the Articles of
Incorporation establishing and classifying shares of the Wilshire
5000 Index Portfolio is incorporated by reference to
Post-Effective Amendment No. 13 to the Registration Statement
on Form N-1A which was filed on November 2, 1998 ("Post-Effective
Amendment No. 13").

Articles Supplementary dated June 7, 1999 to the Articles of
Incorporation reclassifying shares of the Wilshire 5000 Index
Portfolio is incorporated by reference to Post-Effective
Amendment No. 16 to the Registration Statement on Form N-1A
which was filed on July 2, 1999 ("Post-Effective Amendment
No. 16").

(b) By-Laws dated July 30, 1992, as revised September 17, 1992, are
incorporated by reference to Exhibit (2) of Post-Effective
Amendment No. 3.

<PAGE>

Amended By-Laws dated September 9, 1996, as subsequently
amended October 1, 1996, are incorporated by reference to
Exhibit (2)(b) of Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A which was filed on October
30, 1996 ("Post-Effective Amendment No. 10").

(d) Investment Advisory Agreement between the Fund and Wilshire
Associates Incorporated relating to the Large Company Growth,
Large Company Value, Small Company Growth and Small Company
Value Portfolios dated July 11, 1996 is incorporated by reference
to Exhibit (5)(a) of Post-Effective Amendment No. 10.

Letter Amendment to the Investment Advisory Agreement between the
Fund and Wilshire Associates Incorporated dated June 8, 1998
relating to the Wilshire 5000 Index Portfolio is incorporated
herein by reference to Post-Effective Amendment No. 13.

(e) New Distribution Agreement between the Fund and PFPC
Distributors, Inc., to be filed by amendment.

(f) Not Applicable.

(g) Custody Agreement between the Fund and The Northern Trust Company
dated June 3, 1996 is incorporated herein by reference to
Post-Effective Amendment No. 11.

Letter Agreement between the Fund and The Northern Trust Company
dated November 5, 1996 is incorporated herein by reference to
Post-Effective Amendment No. 11.

(h) Services Agreement between the Fund and First Data Investor
Services Group, Inc. dated May 31, 1999, is incorporated by
reference to Post-Effective Amendment No. 17 to the Registration
Statement on Form N-1A which was filed on October 15, 1999
("Post-Effective Amendment No. 17").

Amendment to Services Agreement between the Fund and PFPC Inc.
(formerly First Data Investor Services Group, Inc.) dated
September 27, 1999 is incorporated herein by reference to Exhibit
(h) of Post-Effective Amendment No. 20.

(i) Not Applicable.

(j) Powers of Attorney of the Directors dated June 12, 2000 are filed
herein.

Consent of PricewaterhouseCoopers LLP is filed herein.

(k) Not Applicable.

<PAGE>

(l) Purchase Agreement between the Company and Wilshire Associates
Incorporated dated November 6, 1998 relating to the Wilshire 5000
Index Portfolio is incorporated herein by reference to
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A which was filed on November 2, 1998.

(m) Service and Distribution Plan under Rule 12b-1, for Qualified
Class shares, adopted as of June 7, 1999 is incorporated herein
by reference to Post-Effective Amendment No. 16.

Service and Distribution Plan under Rule 12b-1, for Horace Mann
Class shares, adopted as of June 7, 1999 is incorporated herein
by reference to Post-Effective Amendment No. 16.

Amended and Restated Service and Distribution Plan under Rule
12b-1, adopted as of June 3, 1997 is incorporated herein by
reference to Post-Effective Amendment No. 11.

(n) Not Applicable.

(o) Amended and Restated Rule 18f-3(d) Plan, adopted as of June 7,
1999 is incorporated herein by reference to Post-Effective
Amendment No. 16.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not Applicable.

Item 25. INDEMNIFICATION

The statement as to the general effect of any contract, arrangements, or
statute under which a Director, officer, underwriter, or affiliated person of
the Registrant is insured or indemnified in any manner against any liability
which may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person, or underwriter for his/her own
protection, is incorporated by reference to Item 27 of Part C of
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A
which was filed on September 23, 1992.

Reference is also made to the Distribution Agreement filed as Exhibit (e).

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The list required by this Item 26 of officers and directors of Wilshire
Associates Incorporated, together with the information as to any other
business, profession, vocation, or employment of substantial nature engaged
in by such officers and directors during the past two years, is incorporated
by reference to Schedules A and D of Form ADV filed by Wilshire Associates
Incorporated pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-36233).

<PAGE>

Item 27. PRINCIPAL UNDERWRITERS

(a) PFPC Distributors, Inc. (the "Distributor") act as principal
underwriter for the following investment companies as of December
1, 2000: International Dollar Reserve Fund I, Ltd., Provident
Institutional Funds Trust, Pacific Innovations Trust, Columbia
Common Stock Fund, Inc., Columbia Growth Fund, Inc., Columbia
International Stock Fund, Inc., Columbia Special Fund, Inc.,
Columbia Small Cap Fund, Inc., Columbia Real Estate Equity Fund,
Inc., Columbia Balanced Fund, Inc., Columbia Daily Income
Company, Columbia U.S.Government Securities Fund, Inc., Columbia
Fixed Income Securities Fund, Inc., Columbia Municipal Bond
Fund, Inc., Columbia High Yield Fund, Inc., Columbia National
Municipal Bond Fund, Inc., GAMNA Series Funds, Inc., WT
Investment Trust, Kalmar Pooled Investment Trust, The RBB
Fund, Inc., Robertson Stephens Investment Trust, HT Insight
Funds, Inc., Harris Insight Funds Trust, Hilliard-Lyons
Government Fund, Inc., Hilliard-Lyons Growth Fund, Inc.,
Hilliard-Lyons Research Trust, Senbanc Fund, ABN AMRO Funds
(Distributed by ABN AMRO Distributors, Inc. a wholly owned
subsidiary of PFPC Distributors, Inc.), BT Insurance Funds
Trust, Alleghany Funds, First Choice Funds Trust, LKCM Funds,
The Galaxy Fund, The Galaxy VIP Fund, Galaxy Fund II, IBJ
Funds Trust, Panorama Trust, Undiscovered Managers Fund, New
Covenant Funds, Forward Funds, Inc., Northern Institutional
Funds, Light Index Funds, Inc. Weiss Peck & Greer Funds
Trust, Weiss Peck & Greer International Fund, WPG Growth
Fund, WPG Growth & Income Fund, WPG Tudor Fund, RWB/WPG U..S.
Large Stock Fund, Tomorrow Funds Retirement Trust, The Govett
Funds, Inc., IAA Trust Growth Fund, Inc., IAA Trust Asset
Allocation Fund, Inc., IAA Trust Tax Exempt Bond Fund, Inc.,
IAA Trust Taxable Fixed Income Series Fund, Inc., Matthews
International Funds, MCM Funds, Metropolitan West Funds,
Smith Breeden Series Fund, Smith Breeden Trust, Stratton
Growth Fund, Inc., Stratton Monthly Dividend REIT Shares,
Inc., The Stratton Funds, Inc., Trainer, Wortham First Mutual
Funds and The BlackRock Funds, Inc. (Distributed by
BlackRock Distributors, Inc. a wholly owned subsidiary of
PFPC Distributors, Inc.), Northern Funds Trust (Distributed
by Northern Funds Distributors, LLC. a wholly owned
subsidiary of PFPC Distributors, Inc.) and The Offit Variable
Insurance Fund, Inc. (Distributed by Offit Funds Distributor,
Inc. a wholly owned subsidiary of PFPC Distributors, Inc.)
PFPC Distributors, Inc. is registered with the Securities and
Exchange Commission as a broker-dealer and is a member of the
National Association of Securities Dealers. PFPC
Distributors, Inc. is located at Four Falls Corporate Center,
Suite 600, West Conshohocken, Pennsylvania 19428-2961.

<PAGE>

(b) The information required by this Item 27(b) with respect to each
director, officer or partner of PFPC Distributors, Inc. ("PFPC
Distributors") is incorporated by reference to Schedule A of Form
BD filed by PFPC Distributors with the SEC pursuant to the
Securities Act of 1934 (File No. 8-46564). No director, officer,
or partner of PFPC Distributors holds a position or office with
the Registrant.

Item 28. LOCATION OF ACCOUNTS AND RECORDS

1. PFPC Inc.
3200 Horizon Drive
King of Prussia, PA 19406-0903
(records relating to its function as fund accounting and transfer
agent)

2. PFPC Inc.
101 Federal Street
Boston, Massachusetts 02110
(records relating to it functions as administrator)

3. PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
(records relating to its functions as administrator)

4. PFPC Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
(records relating to its functions as distributor)

5. The Northern Trust Company
50 LaSalle Street
Chicago, Illinois 60675
(records relating to its function as custodian)

6. Wilshire Associates Incorporated
1299 Ocean Avenue
Suite 700
Santa Monica, CA 90401
(records relating to its function as investment adviser)

Item 29. MANAGEMENT SERVICES

Not Applicable.

Item 30. UNDERTAKINGS

Not Applicable.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant, Wilshire
Target Funds, Inc., certifies that this Post-Effective Amendment No. 20 to
the Registration Statement meets the requirements for effectiveness pursuant
to Rule 485(b) of the Securities Act of 1933, as amended, and the Registrant
has duly caused this Post-Effective Amendment No. 20 to be signed on its
behalf by the undersigned, thereto duly authorized in the City of Boston, and
Commonwealth of Massachusetts on the 18th day of December, 2000.

WILSHIRE TARGET FUNDS, INC.

BY: /s/ Thomas D. Stevens
--------------------------
Thomas D. Stevens
PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date

<S> <C> <C>
/s/ Thomas D. Stevens President, December 18, 2000
--------------------------------
Thomas D. Stevens Chairman of the Board,
and Director
(Principal Executive Officer)

/s/ David R. Borger Treasurer December 18, 2000
-------------------------------- (Principal Financial Officer)
David R. Borger

* Director December 18, 2000
--------------------------------
DeWitt F. Bowman

* Director December 18, 2000
--------------------------------
Cynthia A. Hargardon

* Director December 18, 2000
--------------------------------
Robert J. Raab, Jr.

* Director December 18, 2000
--------------------------------
Anne Wexler

*BY: /s/ GAIL A. HANSON December 18, 2000
Gail A. Hanson
Attorney-in-Fact

</TABLE>

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Item Exhibit

<S> <C>
(j) Powers of Attorney of the Directors dated
June 12, 2000.

(k) Consent of PricewaterhouseCoopers LLP

</TABLE>